[ET Net News Agency, 17 July 2025] US President Trump denied rumours and said he
currently has no plans to dismiss Powell. After a volatile session, US stocks ended
higher. In Hong Kong, the market traded within a narrow range in early dealings. While
autos and biotech were in favour, some tech stocks and China SOEs declined. At midday, the
HSI closed at 24,534, up 17 points or less than 0.1 percent, with main board turnover
close to HKD 128.7 billion. The Hang Seng China Enterprises Index stood at 8,865, up 4
points or less than 0.1 percent. The Hang Seng Tech Index was at 5,434, up 15 points or
0.3 percent.

"Mak Ka Ka: HSI testing top of uptrend channel, hopes for foreign funds returning to Hong
Kong"

The HSI opened 113 points higher this morning but then fluctuated, at one stage falling
as much as 68 points to an intraday low of 24,447. Mak Ka Ka, Head of Financial Products
Trading and Research Department of SinoPac Securities (Asia), told ET Net News Agency that
the HSI has risen more than 20 percent so far this year, mainly supported by the
preference of southbound funds, including long-term institutional and insurance capital.
She noted that capital flows in Hong Kong stocks remain active today, but the HSI is now
approaching its year-to-date high, and the trend seems to be testing the top of the rising
channel. She expects resistance in the short term at the 24,800 level, with support at
23,800.
Mak Ka Ka added that foreign funds are currently underweight in Asian equities,
including Hong Kong and A-shares, with allocations still relatively low in overall
portfolios. If global funds eventually flow back into Hong Kong equities and with
continued support from southbound capital, she believes the HSI could subsequently test
the 25,200 level.

"HIBOR expected to gradually rise to a reasonable level of 2 percent"

Hong Kong Interbank Offered Rate (HIBOR) continues to rise, with the one-month rate tied
to mortgage rates climbing to 1.17482 percent on Wednesday, 16 Apr, reaching a one-month
high. Mak Ka Ka noted that HIBOR's previous decline was rather sharp and is now in a
period of adjustment. With the Hong Kong dollar repeatedly triggering the weak-side
convertibility undertaking recently, the HKMA has intervened several times to buy Hong
Kong dollars, pushing the aggregate balance of the banking system below HKD 100 billion.
She expects HIBOR will gradually climb to around 2 percent, a relatively reasonable level,
but the pace of increase may not be fast and the overall impact on the market should be
limited.
Mak Ka Ka suggested that investors could focus on high-yield defensive sectors such as
China banks and China telecoms, as well as high-beta AI concept stocks. She is most
optimistic about China Construction Bank (00939), which she expects to rise steadily,
supported by a return to a high-yield environment and a re-rating of the China banks
sector. She believes investors can consider buying if the share price pulls back to HKD
8.2, with a six-month target price of HKD 8.9.

"Biotech and innovative pharma stocks still set to outperform in the second half"

Sino Biopharmaceutical (01177) announced after the market close on 15 Apr that it will
acquire up to 95.09 percent of LaNova Medicines for no more than USD 951 million, raising
its stake from 4.91 percent to 100 percent. Upon completion, LaNova Medicines will become
its indirect wholly owned subsidiary. After deducting LaNova Medicines's estimated cash
and bank deposits of about USD 450 million on completion, the net payment for the
acquisition will be around USD 501 million. The stock rose 3.4 percent this morning (17
Apr), closing at HKD 6.66 at midday, extending its winning streak to seven days with a
cumulative gain of 24 percent.
Mak Ka Ka believes Sino Biopharmaceutical is benefiting from positive news on stake
increases and acquisitions, and expects the short-term share price trend to remain
relatively strong. She advises investors to consider buying if the share price pulls back
to 6.4, with a medium-term target price of 7.8. She also said that biotech and innovative
pharma sectors remain attractive in the second half, with related stocks enjoying both
overseas expansion advantages and growing international recognition. She recommends these
sectors for medium- to long-term accumulation, expecting them to outperform the broader
Hong Kong market in the second half.