[ET Net News Agency, 15 July 2025] Mainland China's second-quarter GDP grew 5.2%
year-on-year, better than market expectations. Industrial output for June rose by 6.8%
year-on-year, reaching a three-month high. However, retail sales growth slowed to 4.8%
year-on-year, below the Reuters survey median and marking a four-month low. The Hong Kong
market reacted mildly, with investors awaiting US CPI data to be released tonight. The HSI
dipped and rebounded during the session, closing the morning at 24,250, up 47 points or
0.2%, with main board turnover close to HKD 144 billion. The Hang Seng China Enterprises
Index was at 8,741, up 8 points or 0.1%. The Hang Seng Tech Index stood at 5,305, up 21
points or 0.4%.

Kung Wai Ting: "National team" has entered the market, making sharp downturns unlikely for
Hong Kong stocks

During this period of sideways consolidation, short-term trading is dominating the Hong
Kong market. The HSI was briefly pushed above the 24,500 level in early trading, but then
reversed in a pattern similar to last Friday, at one point dipping to 24,125 and ending
the morning with a gain of less than 100 points. Kung Wai Ting, the Chief Investment
Officer of China Asset Management (Hong Kong), told ET Net News Agency that with the
renminbi exchange rate stabilising and US stocks performing well, there are few major
negative factors in the short term. He expects Hong Kong stocks are still in a healthy
correction phase. The biggest risk lies in early August, if US President Trump adopts a
tougher-than-expected stance on tariffs, it could trigger a "black swan" event for
equities. Otherwise, the market has already priced in moderate tariff measures, and Kung
expects the HSI to find support at 23,500.
Kung remains optimistic about the outlook. First, the probability of a rate cut in
September has increased, which he believes will gradually strengthen the market's
underlying support. Second, as turnover on the Hong Kong market has consistently stayed
around HKD 200 billion, he sees this as a sign that the "national team" (state-backed
funds) is already actively participating. He does not believe that the current sideways
trend will lead to heavy selling.

Stablecoins remain a key theme, but further upside may be limited

Stablecoin-themed stocks have been hotly traded. This morning, news emerged that CMB
International, under China Merchants Securities (06099), was granted a virtual asset
licence by the SFC yesterday, becoming the first mainland bank-affiliated broker to
receive such a licence. CMB Securities opened 15% higher but quickly pared gains, with
other stablecoin concept stocks also pulling back, sparking concerns about profit-taking.
Kung Wai Ting admitted that while the stablecoin theme has been very hot, with many
related stocks doubling in a short period, the excitement may begin to cool as more
licences are issued, leaving limited room for further rapid gains. He cited US-listed
Circle as an example: its share price has been moving sideways recently, and Kung expects
profit-taking to emerge in the sector.
However, he believes that after a period of consolidation, stablecoins will remain a key
area for government-driven development. Positive policy news can still benefit related
stocks, but whether they can repeat this recent surge is uncertain. Investors should be
mindful of increased volatility if trading these themes again.