Group 1 - Morgan Stanley increased its stake in Hong Kong Exchanges and Clearing Limited (00388) by purchasing 1,221,923 shares at a price of HKD 431.1066 per share, totaling approximately HKD 527 million [1] - Following the acquisition, Morgan Stanley's total shareholding in Hong Kong Exchanges and Clearing Limited reached approximately 89,702,800 shares, representing a holding percentage of 7.07% [1]

Group 1 - Morgan Stanley increased its stake in Hong Kong Exchanges and Clearing Limited (00388) by purchasing 1,221,923 shares at a price of HKD 431.1066 per share, totaling approximately HKD 527 million [1] - Following the acquisition, Morgan Stanley's total shareholding in Hong Kong Exchanges and Clearing Limited reached approximately 89,702,800 shares, representing a holding percentage of 7.07% [1]

Core Viewpoint - The Hong Kong Stock Exchange has successfully narrowed trading spreads since the implementation of the first phase of reforms in August last year, leading to reduced trading costs and improved overall liquidity [1] Group 1: Trading Spread Reforms - The first phase of the trading spread narrowing reform has significantly reduced trading spreads in the Hong Kong securities market [1] - The reduction in trading spreads has resulted in lower trading costs for market participants [1] - Overall liquidity in the market has improved as a result of these reforms [1] Group 2: Future Initiatives - The Hong Kong Stock Exchange plans to implement the second phase of the trading spread narrowing arrangement by mid-2026 to further enhance market efficiency and liquidity [1] - Other important initiatives include the implementation of a paperless securities market (USM) and reforms to trading units [1]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) plans to implement the second phase of lowering the minimum tick size for securities trading by mid-2026, following the successful execution of the first phase in August 2025, which showed no adverse effects on the market [1][2] Group 1 - The first phase of the minimum tick size reduction has been completed, and stocks within the reduced range have not shown negative impacts [1] - The second phase will reduce the minimum tick size for securities priced between 0.5 to 10 HKD by 50%, from 0.01 HKD to 0.005 HKD [1] - HKEX will conduct end-to-end testing and market rehearsals in 2026 to ensure the smooth implementation of the second phase [1] Group 2 - HKEX's Chief Operating Officer, Liu Bi-yin, noted that the first phase of the reform has significantly narrowed the bid-ask spread, reducing trading costs and enhancing overall liquidity [2] - The second phase aims to further improve market efficiency and liquidity, alongside other initiatives such as the implementation of a paperless securities market and trading unit reforms [2] - HKEX is committed to collaborating with partners and stakeholders to promote market innovation and maintain Hong Kong's status as a leading global market [2]

Group 1 - The Hong Kong Stock Exchange (HKEX) will launch six new stock options on January 19, 2026, expanding the stock options market and providing investors with more choices [2] - The new stock options will include Zijin Mining International (02259), WuXi AppTec (02359), BeiGene (06160), Lao Poo Gold (06181), Horizon Robotics (09660), and CanSino Biologics (09926) [2] - The average daily trading volume of the derivatives market at HKEX reached a record high of 1,662,751 contracts last year, representing a 7% year-on-year increase [2] Group 2 - Stock options, including monthly and weekly expiry contracts, were among the most actively traded products, with an average daily trading volume of 879,831 contracts, marking a 22% year-on-year increase [2] - The new stock options will have varying contract sizes, such as 200 shares for Zijin Mining International and BeiGene, and 500 shares for WuXi AppTec [3] - The launch will include contracts for multiple months in 2026, specifically January, February, March, April, June, September, and December for certain stocks [3]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) will launch six new stock options on January 19, 2026, expanding the stock options market and providing investors with more choices [1] Group 1: New Stock Options - The new stock options will include Zijin Gold International (02259), WuXi AppTec (02359), BeiGene (06160), Lao Poo Gold (06181), Horizon Robotics (09660), and CanSino Biologics (09926) [1] - The contract sizes for the new options are as follows: Zijin Gold International (200 shares), WuXi AppTec (500 shares), BeiGene (200 shares), Lao Poo Gold (100 shares), Horizon Robotics (3,000 shares), and CanSino Biologics (1,000 shares) [2] Group 2: Market Performance - The average daily trading volume of HKEX's derivatives market reached 1,662,751 contracts last year, marking a 7% year-on-year increase and setting a new record [1] - Stock options, including monthly and weekly expiry contracts, were among the most actively traded products, with an average daily trading volume of 879,831 contracts, a 22% year-on-year increase and a new record high [1]

Group 1 - The Hong Kong Stock Exchange (HKEX) announced the launch of six new stock option categories on January 19, aimed at expanding the stock options market and providing investors with more choices [1] - The average daily trading volume in the HKEX derivatives market reached 1,662,751 contracts last year, marking a 7% year-on-year increase and setting a new record [1] - Stock options, including monthly and weekly expiry contracts, were among the most actively traded products, with an average daily trading volume of 879,831 contracts last year, which is a 22% year-on-year increase and also a record high [1] Group 2 - The new stock options include contracts for companies such as Anjin Huangjin Guo Yi Limited (2259), Wuxi Zhenming Kangde New Town Development Co., Ltd. (2359), and others, with varying contract sizes and expiry months [2] - Specific contract sizes for the new options range from 100 shares to 3,000 shares, catering to different investor needs [2] - The introduction of these new options is expected to enhance liquidity and trading opportunities in the stock options market [2]

Market Overview - The Hang Seng Index (HSI) closed at 26,310.99, up by 161.68 points or 0.62% as of January 8, 16:00 Eastern Time [1] - The index reached a high of 26,311.38 and a low of 25,998.12 during the trading session, with a trading volume of 50.328 million shares [1] Major Blue-Chip Stocks Performance - HSBC Holdings closed at HKD 125.439, up by 0.92% compared to the Hong Kong close [2] - Tencent Holdings closed at HKD 615.197, down by 0.13% compared to the Hong Kong close [2] Stock Price Movements - Tencent Holdings: Latest price HKD 616.000, down by HKD 8.500 or 1.36%, with an ADR price of 615.197, reflecting a decrease of 0.13% [3] - Alibaba Group: Latest price HKD 142.600, down by HKD 3.300 or 2.26%, with an ADR price of 150.458, reflecting an increase of 5.51% [3] - HSBC Holdings: Latest price HKD 124.300, down by HKD 2.900 or 2.28%, with an ADR price of 125.439, reflecting an increase of 0.92% [3] - Other notable movements include Meituan-W down by 3.35% and JD.com down by 2.02% [3]

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) is currently experiencing a technical analysis phase with support levels at 415 HKD and 405 HKD, and resistance levels at 438 HKD and 456 HKD, indicating a potential upward movement probability of 52% [1][3]. Technical Analysis - The recent performance of HKEX shows a relatively strong trend compared to the Hang Seng Index, with the stock price stabilizing around 430 HKD, above the upper band of the Bollinger Bands [3]. - The short-term resistance level is identified at approximately 438 HKD, and if this level is breached, there is potential for the stock to rise to 440 HKD [3]. - Current technical signals indicate a predominance of "sell" signals, with 11 sell signals compared to 6 buy signals, suggesting a cautious outlook for short-term movements [3]. Derivative Products Performance - Following a phase of price increase on January 5, 2026, related warrants (窩輪) showed significant reactions, with UBS bull certificates (64102) rising by 27%, Societe Generale bull certificates (57689) by 24%, and Morgan Stanley call warrants (22028) by 23% within two days, highlighting the leverage effect of these products [3][5]. - The key factors influencing the price movements of warrants include the proximity of the exercise price to the underlying stock price and changes in implied volatility, which affects market expectations of future volatility [5][6]. Investment Recommendations - For investors holding HKEX-related warrants, it is advisable to set profit-taking levels, such as placing a stop-loss slightly below recent highs for Societe Generale bull certificates (69254) to avoid profit erosion [6]. - New investors are cautioned against chasing high-priced warrants that have already seen significant increases, such as UBS bull certificates (64102), and are encouraged to consider alternatives like Societe Generale bull certificates (69254) and Morgan Stanley call warrants (22028) due to their lower premium and higher leverage [6]. - For those with a bearish outlook on HKEX's short-term performance, Societe Generale bear certificates (69592) are recommended, as they offer the lowest premium and a high leverage of 19.1, allowing for better capitalizing on potential declines [6]. Selected Products Overview - A summary of selected products related to HKEX includes: - Morgan Stanley call warrant (22028) with a leverage of 13 - UBS call warrant (23422) with a leverage of 9.4 - Societe Generale bear certificate (69592) with a leverage of 19.1 [7].

Core Viewpoint - The Hong Kong stock market is expected to see significant trading activity in 2025, driven by macroeconomic recovery, favorable policies, industrial upgrades, and improved global liquidity, leading to high growth in Hong Kong Stock Exchange's performance [1] Market Overview - As of December 2025, the market capitalization of the Hong Kong securities market was HKD 47.39 trillion, a decrease of 1.26% quarter-on-quarter but an increase of 34.18% year-on-year [1] - The average daily trading amount (ADT) for 2025 reached HKD 249.82 billion, up 90.28% year-on-year, with Q4 ADT at HKD 229.81 billion, reflecting a 22.97% increase year-on-year but a 19.75% decrease quarter-on-quarter [1][2] Southbound Capital Inflow - In 2025, southbound capital saw a net inflow of HKD 1.301455 trillion, a year-on-year increase of 74.92%, with quarterly inflows of HKD 411.33 billion, HKD 272.86 billion, HKD 399.99 billion, and HKD 217.28 billion respectively [2] - The influx of southbound capital has significantly boosted trading activity in the Hong Kong stock market [2] IPO Market - In 2025, there were 117 new listings, an increase of 47 compared to the previous year, with total IPO fundraising amounting to HKD 285.81 billion, a year-on-year increase of 224.24% [2] - The increase in IPO fundraising was largely driven by major A-share companies listing in Hong Kong, contributing to 49.02% of the total IPO fundraising [2] Derivatives and Commodity Market - In 2025, the average daily trading volume of futures and options reached 1.663 million contracts, a year-on-year increase of 7.1% [3] - The average daily trading volume of metal contracts on the LME was 757,000 lots, reflecting a 14.0% year-on-year increase [3] Interest Rate Impact - Following the Federal Reserve's interest rate cuts, the HIBOR rate has seen a slight decline, with the 6-month HIBOR dropping from 4.17% at the beginning of 2025 to 2.99% [4] - The decline in interest rates is expected to enhance trading activity in the Hong Kong stock market, which may offset some negative impacts on investment income [4] Earnings Forecast - Revenue forecasts for 2025, 2026, and 2027 are projected to increase by 26.53%, 2.70%, and 3.84% respectively, reaching HKD 28.31 billion, HKD 29.07 billion, and HKD 30.19 billion [5] - Net profit forecasts for the same years are expected to rise by 38.49%, 6.22%, and 4.01% respectively, reaching HKD 17.60 billion, HKD 18.69 billion, and HKD 19.44 billion [5] Market Dynamics - The ongoing liquidity support from the Federal Reserve's monetary policy shift is expected to benefit the Hong Kong stock market [6] - The continuous inflow of southbound capital is anticipated to maintain high trading activity levels [6] - The valuation advantage of the Hong Kong stock market remains, with the Hang Seng Index's PE-TTM at approximately 11.96 times, compared to the 17.00 times of the CSI 300 [6] Long-term Outlook - The Hong Kong Stock Exchange is expected to benefit from increased trading activity and valuation uplift, with a target price of HKD 520 per share, maintaining a "buy" rating [7]