[ET Net News Agency, 26 May 2025] US President Donald Trump has announced plans to
impose a 50% tariff on goods from the European Union, causing market turbulence and a
decline in US stocks on Friday. However, tensions eased as both sides softened their
stance, with the implementation of the tax plan postponed until 9 July. The Hang Seng
Index opened nearly 100 points lower this morning, but following a sell-off in Meituan
(03690) and a sharp drop in automotive stocks, the index's midday loss widened to 235
points or 1%, closing at 23,366, with turnover exceeding HKD 127.7 billion. The Hang Seng
China Enterprises Index reported 8,474, down 109 points or 1.3%, while the Hang Seng Tech
Index reached 5,177, down 69 points or 1.3%.

"Wan Kong Shing: US tariffs on EU is likely to be moderate, short-term negative impact"

With the Hang Seng Index facing downward pressure, Trump's threat to impose a 50% tariff
on the EU and his warning to companies like Apple and Samsung to relocate production to
the US have added to market concerns. Following last Friday's US stock decline, Hong Kong
stocks also experienced selling pressure, with the Hang Seng Index dropping over 200
points after opening nearly 100 points lower. Wan Kong Shing, the Chief Investment Officer
of iFAST Global Markets, told ET Net News Agency that a pullback after six consecutive
weeks of gains for the index is normal, with expected support around 22,600. He
anticipates that the US is unlikely to enforce a 50% tariff on the EU, as both sides would
struggle to bear the consequences. However, he believes that the EU has limited
countermeasures and that tariffs will likely end up around 20% to 30%, which would exert a
negative influence on the market, though not for an extended period.
Wan Kong Shing added that if the index tests the 22,600 level, market participants will
need to monitor developments in US Treasury yields and whether the Federal Reserve will
adjust its monetary policy in response.

"BYD is expected to drop to around HKD 400; European sales support prices"

Reports suggest that BMW has recently lowered its future sales forecasts for pure
electric models in China, including the new generation electric vehicle set to launch in
2026, while simultaneously raising projections for some petrol models. This has raised
concerns about future demand for electric vehicles, leading to a pullback in BYD (01211)
shares, which fell nearly 8% after hitting record highs, marking the first time in two
weeks that it fell below the 10-day moving average. Wan Kong Shing noted that BYD's sales
have been strong, particularly in Europe, where it has successfully surpassed Tesla. He
views the current price drop as a good buying opportunity, expecting that the news will
not significantly impact BYD's sales growth in Europe. He recommends considering buying in
the range of HKD 400 to 403, with the potential for the stock to break new highs again,
targeting the historical barrier of HKD 500.