[ET Net News Agency, 15 October 2025] Lingering China-US trade war concerns continue to
weigh on financial markets. However, Federal Reserve Chair Jerome Powell has suggested the
Fed may stop reducing its balance sheet in the coming months. Although US President Trump
has threatened to ban exports of edible oil to China in retaliation for China not
purchasing US soybeans, this did not prevent the HSI from rebounding this morning,
reaching a high of 25,870. At midday, the HSI was up 308 points or 1.2 percent at 25,749,
with main board turnover exceeding HKD 15.86 billion. The Hang Seng China Enterprises
Index rose 101 points or 1.1 percent to 9,180, while the Hang Seng Tech Index gained 69
points or 1.2 percent to 5,992.

"Nip Chun Pong: Both sides seeking leverage ahead of talks, HSI to remain range-bound in
the short term"

The HSI has fallen for seven consecutive trading days, dropping 1,940 points from its
high on 2 Oct to yesterday (14 Apr). This morning's strong open and rebound of around 400
points is seen as a technical correction. Nip Chun Pong, the Chief Strategist at Blackwell
Global Securities, told ET Net News Agency that after several days of declines, today's
move is a technical rebound. Although the US recently softened its trade war stance,
indicating tariffs on China may not rise to 100 percent and that a China-US leaders'
meeting is possible, US President Trump's fresh threat to ban edible oil exports to China
has added new uncertainty ahead of the meeting at the end of the month. Nip Chun Pong
expects both sides to continue manoeuvring for leverage before negotiations, so the shadow
of the China-US trade war will continue to affect the market. He forecasts that the HSI
will remain volatile and largely range-bound between 25,500 and 26,200. However, if the
HSI can hold above the 50-day moving average (around 25,841) by Friday, the outlook could
improve.

"AI is a lasting trend, no bubble in leading Hong Kong AI stocks"

Wall Street has recently shown concern about an AI bubble. Following earlier warnings
from the IMF and Bank of England, there are doubts over whether AI investment can deliver
corresponding profits. According to the latest Bank of America monthly survey, 54 percent
of fund managers now believe technology stock valuations are too high, up from less than
50 percent last month. They identify an artificial intelligence (AI) bubble as the biggest
tail risk, followed by resurgent inflation, a loss of Fed independence, and US dollar
depreciation.
Nip Chun Pong believes AI development is a lasting trend, with strong market demand for
new AI products. Many AI companies have recently launched new products, for example,
Google's Nano Banana, and ChatGPT's Sora2, which became the top download just one week
after launch. AI product innovation continues to draw attention, and whether products can
be monetised depends on each company's strengths. At the industry level, there is no
immediate risk of an AI bubble bursting, though some companies may fall behind if their
fundamentals cannot keep pace with share price gains.
He also noted that Wall Street's concerns over an AI bubble are mainly focused on US
companies. At present, Hong Kong-listed AI stocks remain undervalued compared to US peers.
Google currently has a price-to-earnings ratio of about 26 times, Microsoft is at 37
times, while Alibaba (09988) is around 20 times, Kuaishou (01024) is under 20 times, and
Baidu (09888) is only 12 times. Therefore, there is no sign of a bubble in Hong Kong AI
stocks for now. However, these shares have rallied sharply this year, both Alibaba and
Kuaishou have doubled, and Baidu has jumped as much as 90 percent from its low, leading to
some profit-taking. Still, the pullback in these three shares has so far been less than 20
percent, which is considered a healthy correction. Nip Chun Pong believes that the
performance of AI stocks will continue to track the broader market. For example, as long
as the HSI holds above its 50-day moving average, Alibaba is expected to find support at
HKD 155.