Xin Lang Cai Jing·2026-01-04 07:20Market Performance - The Hang Seng Index increased by 2.01% to 26,338.47 points, the Hang Seng Tech Index rose by 4.31% to 5,736.44 points, and the Hang Seng China Enterprises Index gained 2.85% to 9,168.99 points during the week from December 29, 2025, to January 2, 2026 [5][32] - Among the primary sectors, 7 sectors rose while 4 sectors declined. The Information Technology, Energy, and Materials sectors saw increases of 4.54%, 3.97%, and 2.98% respectively, while the Consumer Staples, Utilities, and Healthcare sectors experienced declines of 2.25%, 1.60%, and 0.59% respectively [7][34] Liquidity and Trading Volume - The average daily trading volume on the Hong Kong Stock Exchange was HKD 171.19 billion, an increase of HKD 31.26 billion from the previous week. The average daily short-selling amount was HKD 19.93 billion, up by HKD 2.96 billion, with short-selling accounting for 11.78% of the trading volume, a decrease of 0.22 percentage points from the previous week [13][39] - There was a net outflow of HKD 3.81 billion from southbound funds, a decrease of HKD 6.37 billion compared to the previous week's net inflow [14][40] Valuation and Risk Premium - As of January 2, 2026, the PE and PB ratios for the Hang Seng Index were 12.09 times and 1.23 times, respectively, both up by 2.36% from the previous week, placing them at the 79% and 56% percentiles since 2010 [2][16] - The risk premium for the Hang Seng Index was calculated at 4.08% based on the 10-year US Treasury yield of 4.19%, which is at the 4% percentile since 2010 [21][45] - The Hang Seng Tech Index had a PE ratio of 23.8 times and a PB ratio of 3.15 times, positioned at the 36% and 66% percentiles since 2010 [2][16] Investment Outlook - The Federal Reserve's December meeting minutes indicated a consensus on interest rate cuts, although there were significant disagreements among officials. The manufacturing PMI for December in China was reported at 50.1%, indicating expansion, while the non-manufacturing PMI was at 50.2% [29][50] - The technology sector is expected to remain a long-term investment focus due to multiple favorable factors such as price increases in the supply chain, mergers and acquisitions, and domestic substitution [29][50] - The consumer sector is anticipated to benefit from policy support, with current valuations at relatively low levels, suggesting significant medium to long-term upside potential [29][50]