Group 1 - The Hong Kong stock market is experiencing positive developments, including the implementation of the "Stablecoin Ordinance" to enhance the digital asset regulatory framework [1] - There has been an increase in A-share companies listing in Hong Kong, with 5 companies listed this year and around 40 more in the pipeline, covering sectors such as technology, consumer goods, new energy, and pharmaceuticals [1] - The Hong Kong Stock Exchange (HKEX) is reforming its listing system to facilitate these listings, which is expected to improve market liquidity and trading demand [1] Group 2 - CITIC Securities indicates that the HKEX's core business will benefit from improved market liquidity and the expansion of the derivatives market, which opens up revenue growth opportunities [1] - The People's Bank of China’s recent interest rate cuts are expected to enhance market liquidity, while cross-border wealth management initiatives are bringing in more funds [1] - The valuation of HKEX remains attractive, with expectations that the second-quarter performance will drive valuations back to reasonable levels [1] Group 3 - The Hong Kong Stock Connect 50 ETF (code: 159712) tracks the Hong Kong Stock Connect 50 Index (code: 930931), which includes 50 highly liquid stocks listed in Hong Kong, primarily focusing on large-cap blue-chip companies [1]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) shows a stable upward trend, with the stock price reaching 401.2 HKD, reflecting a 1.42% increase, and technical indicators suggest a potential for further gains despite being in the overbought zone [1][9]. Technical Analysis - The stock price has broken through all major moving averages, with the 10-day moving average at 393.4 HKD and the 30-day moving average at 372.1 HKD indicating a bullish alignment [1]. - The MACD indicator remains in a golden cross state, suggesting a strengthening mid-term trend [1]. - The RSI has reached 70, indicating an overbought condition, and the upper Bollinger Band is at 406 HKD, which coincides with current resistance levels, suggesting a possible short-term technical adjustment [1]. - Key support levels are identified at 384 HKD and a stronger support at 360 HKD, while resistance is seen at 406 HKD, with a potential challenge at 418 HKD if broken [1]. Derivative Products Performance - Recent trading data from June 2 to June 4 shows that while HKEX's stock rose by 0.66%, related derivative products exhibited varying degrees of leverage effects, particularly bull certificates [3]. - HSBC bull certificate 53712 increased by 11% over two days, while Societe Generale bull certificate 54739 rose by 10%, highlighting the advantages of bull certificates in a moderate upward market [3][4]. - Call options such as Barclays call option 27807 and HSBC call option 29547 recorded an 8% increase, demonstrating significant leverage effects [4]. Investment Strategies - For bullish investors, HSBC call option 29547 offers a leverage of 8.9 times with a strike price of 450.2 HKD, while Barclays call option 27807 provides a leverage of 9 times with a strike price of 450 HKD, both suitable for medium-term holding [6]. - For bearish investors, HSBC put option 16951 offers a leverage of 9.4 times with a strike price of 333.68 HKD, and UBS put option 16913 provides a leverage of 9 times with the same strike price, both having the lowest premiums and implied volatilities [7]. - UBS bear certificate 52551 has a leverage of 16.2 times with a recovery price of 420 HKD, while JPMorgan bear certificate 53686 offers a leverage of 15.9 times, suitable for bearish market conditions [7].

Core Viewpoint - The article discusses the transformation of the Hong Kong stock market, highlighting its resurgence as a capital haven despite previous challenges, driven by significant reforms and an influx of southbound capital from mainland investors [3][6][12]. Group 1: Market Performance and Trends - Xiaomi completed a HKD 4.25 billion placement, marking the third-largest flash placement in Hong Kong's history, following Meituan and BYD [3]. - In 2023, Hong Kong's IPO financing reached HKD 653.25 billion, a year-on-year increase of 691.33%, while total placements surged to HKD 1,242.68 billion, up 853.47% [4]. - The first quarter of 2023 saw a new high of 27% in equity holdings of Hong Kong stocks by actively managed public funds [4]. Group 2: Challenges Faced by the Market - Prior to 2023, Hong Kong stocks faced a four-year decline, with IPO fundraising dropping to HKD 46.3 billion in 2022, an 86% decrease from 2021, making it the lowest in 20 years [3][4]. - The market suffered from liquidity issues, with large-cap stocks contributing 90% of liquidity, while small-cap stocks struggled [9][10]. - The market's challenges were exacerbated by external factors such as aggressive interest rate hikes by the Federal Reserve and geopolitical tensions [8][10]. Group 3: Reforms and Strategic Changes - The new leadership at the Hong Kong Stock Exchange, including CEO Chen Yiting and Chairman Tang Jiacheng, aims to address liquidity issues and attract competitive companies [12][13]. - Reforms include lowering the listing thresholds for companies, with market capitalization requirements for commercialized companies reduced from HKD 60 billion to HKD 40 billion [13]. - The introduction of the FINI platform has improved the efficiency of new stock subscriptions, significantly reducing the time funds are frozen during the process [14][16]. Group 4: Capital Inflows and Market Dynamics - The influx of southbound capital has been a key driver of market resilience, with significant investments in technology and new consumer sectors [18][20]. - Public funds have increased their holdings in major stocks like Tencent and Alibaba, with a notable rise in technology-related ETFs [20][22]. - Insurance funds have actively increased their stakes in high-dividend stocks, contributing to the overall liquidity of the market [23].

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges (0388.HK) with a 12-month target price of HK$455.00, indicating an upside potential of 13.6% from the current price of HK$400.40 [1][2][10]. Core Insights - Despite a year-to-date share price increase of approximately 35%, the stock is considered undervalued relative to strong market activity levels. The listing pipeline is growing, with over 150 companies having submitted applications to list in Hong Kong [1][22][29]. - The introduction of new products, particularly weekly expiries for index options and stock options, is expected to drive growth in average daily volume (ADV) for options. Historical data from the US and India suggests that index options ADV could outperform cash market volumes by 40 to 50 percentage points [2][44][45]. - The report projects a 15% potential upside to cash equity average daily trading (ADT) from A-share companies listing in Hong Kong over the medium term, with adjustments made to FY26-27E ADT estimates [1][23][41]. Summary by Sections Financial Projections - Revenue estimates for FY25E, FY26E, and FY27E are projected at HK$25,721.8 million, HK$26,772.8 million, and HK$28,006.3 million respectively, reflecting an increase from previous estimates [4][10]. - EPS estimates have been raised by 2%, 9%, and 10% for FY25, FY26, and FY27 respectively, driven by higher volume expectations [2][10]. Market Activity - The report notes that HKEX has regained its position among the top five global IPO venues in Q1 2025, with around US$10 billion raised from IPOs year-to-date, nearly double the amounts raised in 2023 and 2024 [22][24]. - A-share companies listing H-shares for global expansion have accounted for over half of the IPO funds raised since 2024, with approximately 630 A-share companies identified as eligible to list H-shares [23][32]. Options Market - The introduction of zero-day-to-expiry (0DTE) options is anticipated to add approximately 10% to overall options ADV, based on successful models in the US and India [44][48]. - Currently, index options represent about 20% of total options ADV at HKEX, and the report suggests that this could lead to a significant increase in overall trading activity [2][44][60].

Core Viewpoint - The shareholding percentage of Bank of America in Bilibili-W has decreased from 8.02% to 7.72% as of May 28 [1] Company Summary - Bank of America's stake in Bilibili-W has seen a reduction, indicating a potential shift in investment strategy or confidence in the company [1]

Group 1 - Goldman Sachs reports that the Hong Kong Stock Exchange (HKEX) is still undervalued despite a 35% increase in share price this year due to earnings upgrades and valuation expansion [1] - The firm estimates a potential 15% increase in average daily trading volume for fiscal year 2025 if more A-share companies list in Hong Kong, with a 50% probability of occurrence [1] - Goldman Sachs has raised its average daily trading volume forecasts for fiscal years 2026 and 2027 by 7% and 6% respectively, expecting them to reach HKD 240 billion and HKD 258 billion [1] Group 2 - The firm has increased its earnings per share estimates for HKEX for fiscal years 2025, 2026, and 2027 by 2%, 9%, and 10% respectively [1] - Goldman Sachs maintains a "buy" rating on HKEX and has raised the target price from HKD 398 to HKD 455 [1]

Core Viewpoint - The Hong Kong stock market showed strong performance in April, with active trading and positive expectations for continued growth in the exchange's performance [1][2]. Market Segments Cash Market - The Hang Seng Index and Hang Seng Tech Index increased by 10% and 14% respectively compared to the end of 2024. The monthly average daily turnover (ADT) for the Hong Kong Stock Exchange was HKD 274.7 billion, showing a month-on-month decrease of 2.0% but a year-on-year increase of 144.7% [1]. - Northbound capital's monthly ADT was HKD 973.2 billion, with a month-on-month decrease of 20% and a year-on-year increase of 20%. Southbound capital's monthly ADT was HKD 191.1 billion, with a month-on-month decrease of 3% and a year-on-year increase of 145% [1]. Derivatives Market - Futures trading volume increased month-on-month, while options trading volume decreased. The average daily volume (ADV) for futures was 841,000 contracts, reflecting a month-on-month increase of 5.6% and a year-on-year increase of 23.2%. The ADV for options was 1,003,000 contracts, showing a month-on-month decrease of 6.0% but a year-on-year increase of 14.0% [1]. Commodity Market - The London Metal Exchange (LME) saw an increase in trading volume both month-on-month and year-on-year, with an average daily trading volume of 880,000 contracts, up 10.6% month-on-month and 2.7% year-on-year [2]. Primary Market - The IPO scale in the Hong Kong stock market decreased both month-on-month and year-on-year, with two new stocks listed in April, totaling HKD 2.9 billion, down 73% month-on-month and 6% year-on-year [2]. Investment Income - Investment income rates related to the Hong Kong Stock Exchange increased month-on-month but decreased year-on-year. As of the end of April, the 6-month HIBOR was 4.03%, the 1-month HIBOR was 3.95%, the overnight HIBOR was 4.50%, and the US overnight bank funding rate was 4.33% [2]. Macroeconomic Environment Domestic Factors - The overall economic sentiment in China declined, with both supply and demand weakening. The manufacturing PMI for April was 49.0%, down 1.50 percentage points month-on-month. New orders and new export orders indices were 49.2% and 44.7%, down 2.60 and 4.30 percentage points respectively [3]. International Factors - The pause in interest rate cuts has led to tightening liquidity overseas, with the Federal Reserve maintaining the federal funds rate at 4.25%-4.50%. The market expects no rate cuts until June 2025, with a projected 25 basis point cut in September 2025 and a total of 50 basis points for the year [3]. Investment Recommendations - As of the end of April, the company's price-to-earnings (PE) ratio was 30.52x, indicating a high cost-performance ratio. The company is expected to see revenue and other income of HKD 29.1 billion, 30.6 billion, and 32.1 billion for 2025-2027, with net profit attributable to shareholders of HKD 17.3 billion, 18.2 billion, and 19.2 billion respectively, corresponding to PE valuations of 29.2x, 27.7x, and 26.2x [4].

Investment Rating - The report maintains a "Buy" rating for the company [2][6][45] Core Views - The company's PE ratio is 30.52x as of the end of April, positioned at the 20th percentile historically since 2016, indicating a reasonable cost-benefit ratio for investment. The report anticipates that with the continued enhancement of the mutual access policy in Hong Kong's capital market, liquidity in the Hong Kong stock market will continue to rise, leading to an increase in overall market activity and valuation. The company is expected to achieve revenues and other income of HKD 291 billion, 306 billion, and 321 billion for 2025-2027, with net profits attributable to shareholders of HKD 173 billion, 182 billion, and 192 billion, corresponding to PE valuations of 29.2x, 27.7x, and 26.2x respectively [2][7][45]. Summary by Sections Market Performance - In April, the Hong Kong stock market overall rose, with the Hang Seng Index and Hang Seng Tech increasing by 10% and 14% respectively compared to the end of 2024. The monthly average daily trading (ADT) for the Hong Kong Stock Exchange was HKD 2,747 billion, showing a month-on-month decrease of 2.0% but a year-on-year increase of 144.7% [7][10][16]. Business Segments - **Spot Market**: The trading activity in the Hong Kong stock market remained high, with the monthly ADT for northbound funds at HKD 9,732 billion, down 20% month-on-month but up 20% year-on-year. Southbound funds had an ADT of HKD 1,911 billion, down 3% month-on-month but up 145% year-on-year [7][16]. - **Derivatives Market**: Futures trading volume increased, while options trading volume decreased. The average daily volume (ADV) for futures was 84.1 million contracts, up 5.6% month-on-month and 23.2% year-on-year, while options ADV was 100.3 million contracts, down 6.0% month-on-month but up 14.0% year-on-year [20]. - **Commodity Market**: The LME daily average trading volume was 88.0 million contracts, reflecting a month-on-month increase of 10.6% and a year-on-year increase of 2.7% [24]. - **Primary Market**: The IPO scale in April saw a decrease, with only 2 new stocks listed, totaling HKD 29 billion, down 73% month-on-month and down 6% year-on-year [26]. Investment Income - Investment income-related interest rates showed a month-on-month increase but a year-on-year decline. As of the end of April, the 6-month HIBOR was 4.03%, up 0.05 percentage points month-on-month but down 0.65 percentage points year-on-year [33][45]. Macroeconomic Environment - The domestic economic sentiment has generally declined, with the manufacturing PMI for April at 49.0%, down 1.50 percentage points month-on-month. The demand side showed weakness, with new orders and new export orders indices at 49.2% and 44.7% respectively [37][39].

Group 1 - JPMorgan's stake in China Pacific Insurance has decreased from 7.27% to 6.55% as of May 26 [1] - The average share price during this period was 15.1359 HKD [1]

Group 1 - BlackRock's stake in Meituan-W decreased from 6.11% to 5.84% as of May 27 [1]