Core Viewpoint - UBS reports that the proposed "Home Purchase Fund Transfer" could positively impact Hong Kong's real estate market by increasing demand from mainland buyers, potentially alleviating pressure on property prices and inventory levels [1] Group 1: Policy Implications - The Hong Kong government is exploring the relaxation of restrictions on mainland talent transferring funds to purchase property in Hong Kong [1] - The proposal for the "Home Purchase Fund Transfer" is inspired by the concept of mutual connectivity and is currently under discussion, indicating that implementation may not be immediate [1] Group 2: Market Impact - If the policy is implemented, it is expected to boost demand from mainland buyers, which could help ease the pressure on property prices and inventory in the market [1] - UBS anticipates that any policy updates could also release suppressed local demand due to previous U.S. interest rate hikes [1] Group 3: Company Outlook - UBS maintains a positive outlook on several Hong Kong developers, including Hang Lung Properties (00012.HK), Sino Land (00083.HK), Sun Hung Kai Properties (00016.HK), and Kerry Properties (00683.HK) [1]

Core Viewpoint - The China Securities Hong Kong Stock Connect Real Estate Index has shown positive performance over the past month, three months, and year-to-date, indicating a strong recovery in the real estate sector [2]. Group 1: Index Performance - The China Securities Hong Kong Stock Connect Real Estate Index increased by 3.04% over the past month, 9.88% over the past three months, and 13.08% year-to-date [2]. - The index is based on a sample of up to 50 eligible Hong Kong-listed companies that reflect the overall performance of the real estate sector [2]. Group 2: Index Composition - The top ten weighted companies in the index are: Sun Hung Kai Properties (14.11%), Beike-W (12.73%), China Resources Land (10.83%), Cheung Kong Property (7.94%), China Overseas Land & Investment (6.28%), Wharf Real Estate Investment (4.72%), Sino Land (4.39%), Henderson Land Development (4.22%), Longfor Group (2.85%), and Wharf Holdings (2.83%) [2]. - The index is composed entirely of real estate companies, with 100% of its holdings in the real estate sector [3]. Group 3: Index Adjustment Mechanism - The index samples are adjusted semi-annually, with adjustments occurring on the next trading day after the second Friday of June and December [3]. - In special circumstances, the index may undergo temporary adjustments, such as when a sample company is delisted or when new companies meet the criteria for inclusion [3].

Core Viewpoint - Morgan Stanley's research report indicates that the Hong Kong residential market may have reached its bottom due to a decline in supply, a decrease in HIBOR, and an increase in mainland buyers [1] Market Performance - In the first half of the year, residential transaction volume increased by 3.9% to 29,500 units [1] - Transactions for properties priced below HKD 4 million surged by 305%, attributed to stamp duty exemptions [1] Investment Recommendations - Morgan Stanley maintains a positive outlook on the Hong Kong residential market, recommending high dividend yield and well-supplied developers such as New World Development and Henderson Land Development [1] - The report suggests that developers will benefit preferentially in a declining interest rate environment, assigning a "buy" rating to these companies [1]

Core Viewpoint - Morgan Stanley and experts from Meilian Group believe that Hong Kong's housing prices may have bottomed out due to limited supply, declining mortgage rates, and increased contributions from mainland buyers [1] Demand Aspects - In the first half of 2025, overall transaction volume (both new and second-hand units) increased by 3.9% year-on-year, reaching 29,000 units, driven by the decline in Hibor since May 2025, competitive pricing strategies from developers, and increased contributions from mainland buyers [2] - The relaxation of stamp duty in the 2025/26 budget (only HKD 100) led to a 305% year-on-year surge in sales of properties priced at HKD 10 million and below in the first half of 2025 [2] - The mass market is expected to continue outperforming the luxury market, with Meilian forecasting 18,000 sales of new units in 2025, a 6% year-on-year increase [2] Supply Improvement - Potential supply has peaked, with limited land supply and a decrease in new project completions, indicating the market may enter an upward cycle [3] - In the first five months, completed inventory accounted for over 55% of total sales of new units, compared to approximately 40% in the 2023/24 fiscal year, prompting developers to clear inventory [3] - The discount on new unit prices has narrowed from 12% to 9%, indicating improved demand [3] - The absorption rate for new units improved to 64% in the first half of 2025, compared to 57% in 2024 and 50% in 2023 [3] Price Trends - Housing prices may have stabilized in the first half of 2025, with a year-on-year decline of 1%, which is less than expected, aligning with Morgan Stanley's positive outlook [4] - Meilian expects housing prices to rise by 3% in 2025, while Morgan Stanley estimates a 2% increase for the second half of the year, with catalysts potentially emerging when supply drops below 90,000 units [4] Rental Trends - The rental market remains positive, supported by an influx of talent and students from mainland China coming to Hong Kong [5] - Local demand has been suppressed in the past 2-3 years due to rising mortgage rates and falling housing prices, but this trend may change as local residents may shift from renting to buying [5] - Meilian forecasts a 6% year-on-year increase in rental prices for 2025, with a 1.2% increase in the first half of 2025 [5]

Group 1 - The top three companies with the highest short positions are WuXi AppTec (02359), CATL (03750), and COSCO Shipping Holdings (01919), with short ratios of 23.99%, 17.39%, and 14.14% respectively [1][2] - The companies with the largest increase in short positions are Giant Biogene (02367), WuXi AppTec (02359), and Henderson Land Development (00012), with increases of 2.05%, 1.43%, and 1.41% respectively [1][2] - The companies with the largest decrease in short positions are SF Holding (06936), Far East Horizon (03360), and Jiumaojiu International Holdings (09922), with decreases of -1.94%, -1.22%, and -1.18% respectively [1][3] Group 2 - The top ten companies with the highest short ratios include Ganfeng Lithium (01772) at 13.09%, Xiexin Technology (03800) at 12.57%, and Shandong Gold (01787) at 12.35% [2] - The companies with the largest increase in short ratios also include Fuyou Glass (06865) at 12.07% and Tigermed (03347) at 9.81% [2] - The companies with the largest decrease in short ratios include Vanke Enterprise (02202) at 11.38% and Green Leaf Pharmaceutical (02186) at 11.96% [3][4]

Group 1: Market Overview - The Hang Seng Index closed at 23892.32, down 1.06%, while the Hang Seng Tech Index fell by 1.76% to 5231.99 [3][4] - The trading volume for the day was 2338.78 million [4] Group 2: Economic Data - In June, China's Consumer Price Index (CPI) rose by 0.1% year-on-year, ending four consecutive months of deflation [7][8] - The Producer Price Index (PPI) fell by 3.6% year-on-year, with the decline widening by 0.3 percentage points compared to the previous month [7][8] Group 3: Company News - New World Development is reportedly seeking to sell its real estate assets in mainland China, including landmark buildings in cities like Hangzhou, Shenzhen, and Shanghai, following a refinancing agreement [12] - China General Nuclear Power Corporation's renewable energy output in June decreased by 1.3% year-on-year, with a total output of 1403.5 GWh [11] - Cornerstone Pharmaceuticals announced a placement of 100 million new shares at a price of 4.72 HKD per share, raising 4.72 million HKD, with 90% of the proceeds allocated for further development of specific assets [13] Group 4: Sector Insights - Morgan Stanley indicated that Hong Kong real estate stocks have outperformed the Hang Seng Index by 8% since mid-June, suggesting potential profit-taking in the short term [9] - The report highlights that the issuance of convertible bonds by major developers could lead to a decrease in average financing costs, with Henderson Land's recent issuance being a key example [9]

Core Viewpoint - The recent announcement by President Trump regarding potential high tariffs on copper and pharmaceuticals has led to a decline in Hong Kong's stock market, with the Hang Seng Index falling below 24,000 points, reflecting increased macroeconomic risks and impacting market sentiment [1][4]. Market Performance - The Hang Seng Index closed down 1.06% at 23,892.32 points, with a total trading volume of 233.88 billion HKD. The Hang Seng China Enterprises Index fell 1.28%, while the Hang Seng Tech Index dropped 1.76% [1]. - Major blue-chip stocks experienced significant movements, with Henderson Land Development leading the decline, down 8.64% at 25.9 HKD, while China Biologic Products rose 10.06% to 5.91 HKD [2]. Sector Analysis - The technology sector saw a collective decline, with Alibaba down nearly 4% and Tencent over 1%. The copper sector was negatively impacted by Trump's tariff threats, leading to a drop in copper-related stocks [3][6]. - The innovative drug sector performed well, with Hengrui Medicine surging 15.61% to 69.6 HKD, indicating resilience amid broader market declines [3][4]. Specific Stock Movements - Macau's gaming sector showed strong performance, with Wynn Macau up 6.33% and Melco Resorts up 2.12%, driven by robust gaming revenue growth [4][5]. - Copper stocks faced significant declines, with Luoyang Molybdenum down 4.74% and Jiangxi Copper down 3.46%, reflecting market reactions to tariff announcements [5][6]. Commodity Prices - International gold prices fell below 3,300 USD per ounce, influenced by reduced safe-haven demand amid tariff uncertainties. Analysts expect gold prices to remain volatile within a range of 3,000 to 3,500 USD per ounce [7].

Core Viewpoint - The Hong Kong Dividend Low Volatility ETF (520890) has experienced a significant decline in both share count and total assets in 2024, indicating potential challenges in attracting investment [1][2]. Group 1: Fund Overview - The Hong Kong Dividend Low Volatility ETF (520890) was established on September 4, 2024, with an annual management fee of 0.50% and a custody fee of 0.10% [1]. - As of July 8, 2024, the fund had a total of 47.508 million shares and a total size of 66.131 million yuan, down from 123 million shares and 146 million yuan at the end of 2024, representing a 61.38% decrease in shares and a 54.81% decrease in size year-to-date [1]. Group 2: Liquidity and Performance - The cumulative trading amount for the ETF over the last 20 trading days was 150 million yuan, with an average daily trading amount of 7.4938 million yuan [1]. - The current fund manager, Li Qian, has managed the fund since its inception, achieving a return of 39.20% during her tenure [1]. Group 3: Top Holdings - The ETF's top holdings include Far East Horizon, Shougang Resources, Chongqing Rural Commercial Bank, VTECH Holdings, Kerry Properties, Minsheng Bank, Henderson Land, China Petroleum, Sinopec, and Fufeng Group, with respective holding percentages and market values detailed [2]. - The largest holding is Far East Horizon at 3.78%, followed closely by Shougang Resources at 3.72% [2].

Core Viewpoint - Morgan Stanley reports that Henderson Land Development (00012) plans to issue HKD 8 billion convertible bonds (CB), which is somewhat unexpected given the recent strong performance of its stock, as issuing CBs is not common for Hong Kong real estate companies [1] Group 1: Company Actions - The issuance of CBs is seen as a low-cost financing option with a coupon rate of 0.5%, potentially encouraging other developers to explore similar financing methods to lower their average cost of capital [1] - New World Development (00017) is identified as the company with the highest likelihood of a rights issue within the research scope [1] Group 2: Market Performance - Since mid-June, Hong Kong real estate stocks have outperformed the Hang Seng Index by 8% [1] - The recent CB issuance, along with rising Hong Kong Interbank Offered Rate (HIBOR), may trigger short-term profit-taking, particularly in Henderson Land [1] Group 3: Investment Recommendations - Morgan Stanley suggests buying stocks with clear catalysts, such as Swire Properties (01972) due to share buybacks and improvements in the Chinese retail sector, and Link REIT (00823) due to its inclusion in the Stock Connect and capital recycling [1] - For Henderson Land, after the market digests potentially weak performance in the first half of 2025 (with a projected 46% year-on-year decline in net profit due to a one-off project in the first half of 2024), the recommendation is to "buy" [1] - From a tactical perspective, Morgan Stanley sees upside potential in Wharf Real Estate Investment Company (01997), which has been upgraded to "overweight" due to a strengthening trend in retail sales [1]

Group 1: New Listings in Hong Kong - Five companies, including Lens Technology, Geek+, Peak Technology, Dazhong Dental, and Xunzhong Communication, were listed on the Hong Kong Stock Exchange on July 9, reflecting a growing interest in emerging industries and technology firms [1] - Four out of the five companies saw an increase in their stock prices during the pre-market trading on July 8, indicating positive market sentiment [1] Group 2: Bond Issuance by Henderson Land - Henderson Land announced plans to issue Hong Kong dollar-denominated guaranteed convertible bonds through its subsidiary, targeting professional investors only [2] - The net proceeds from the bond issuance are intended for general corporate purposes or refinancing, showcasing the company's proactive approach to capital market tools [2] Group 3: Tianqi Materials' Hong Kong Listing - Tianqi Materials announced its intention to issue H-shares and apply for listing on the Hong Kong Stock Exchange to enhance its global strategy and improve its capital structure [3] - This move is expected to attract foreign investment and signal the internationalization of the new materials industry [3] Group 4: Huabao International's Financial Product Investment - Huabao International reported an investment of 565 million yuan in financial products from Zheshang Bank, indicating a strategy for diversified asset allocation [4] - This investment aims to enhance capital efficiency and may provide funding for future business development [4] Group 5: Hong Kong Market Performance - The Hang Seng Index closed at 24,148.07, with a gain of 1.09% on July 8, while the Hang Seng Tech Index rose by 1.84% [5] - The overall market performance reflects a positive trend in investor sentiment towards the Hong Kong stock market [5]