Market Performance Review - The Hong Kong stock market showed strong performance this week, driven by southbound capital, rising interest rate cut expectations, and technology sector strength, with the Hang Seng Index, Hang Seng Composite Index, and Hang Seng Tech Index rising by +4.07%, +3.82%, and +5.31% respectively [3][13] - Most primary industry sectors recorded gains, with the materials sector continuing to perform strongly, achieving a weekly increase of over 6%. The information technology sector, led by major tech companies like Alibaba and Tencent, also saw a weekly increase exceeding 6% [3][13] - As of the end of the week, the 5-year PE (TTM) valuation percentile for the Hang Seng Composite Index stood at 82.57%, indicating a valuation level above the 5-year average [3] Macroeconomic Environment - The macroeconomic environment for the Hong Kong market remains closely tied to the performance of the Chinese economy, with over 80% of profits in the Hong Kong market coming from Chinese companies [39][41] - In August, China's exports in USD terms grew by 4.4% year-on-year, while imports increased by 1.3%, both figures falling short of expectations [39][46] - The People's Bank of China is expected to conduct a 600 billion yuan reverse repurchase operation on September 15, indicating ongoing monetary support [41] Sector Allocation Outlook - The report favors sectors that are relatively prosperous and benefit from policy support, including automotive, new consumption, innovative pharmaceuticals, and technology [3][46] - Low-valuation state-owned enterprises that are stable in performance and stock price, as well as local Hong Kong banks, telecommunications, and utility dividend stocks, are also highlighted as favorable [3][46] - Attention is drawn to potential impacts from the US-China trade disputes, with recommendations to avoid sectors and companies with significant exposure to the US market [3][46] Buyback Statistics - The total buyback amount for the week was 3.81 billion HKD, a decrease from the previous week's 5.58 billion HKD, with 49 companies participating in buybacks [27][30] - Tencent Holdings led the buyback activity with 2.75 billion HKD, followed by HSBC Holdings with 490 million HKD [27][30] - The information technology and financial sectors saw the highest number of companies engaging in buybacks, with 12 and 9 companies respectively [30]

Core Viewpoint - The ongoing trade tensions between the U.S. and China have severely impacted U.S. soybean farmers, particularly in North Dakota, who are missing out on billions of dollars in potential sales to China due to a lack of purchase commitments from Chinese buyers [1][2][17]. Group 1: Trade Dynamics - North Dakota soybean farmers heavily rely on exports to China, with nearly a quarter of the 4 billion bushels produced annually being exported there [2]. - Last year, China imported approximately $13 billion worth of soybeans from the U.S., a significant increase from $2 billion two decades ago [2]. - Currently, the export commitment for the upcoming soybean harvest is at its lowest level since the 2018-19 season, leading to stagnant soybean prices [2][3]. Group 2: Market Competition - Brazilian soybeans have become increasingly attractive to Chinese buyers, with Brazil supplying 70% of China's soybean imports last year, double the amount from 15 years ago [6][17]. - U.S. soybean prices are currently $0.80 to $0.90 per bushel lower than Brazilian soybeans, but U.S. trade barriers have increased procurement costs for Chinese importers by $2 per bushel [20][21]. - If the current trend continues, U.S. soybean sales to China could drop by 14 to 16 million tons by mid-November [20]. Group 3: Economic Support and Subsidies - The U.S. government has previously provided $23 billion in relief to farmers affected by trade disputes during Trump's first term [15]. - There are discussions about providing similar economic support, but the implementation of such plans is complicated and may take time to benefit farmers [15][16]. - The "Big and Beautiful Act" proposes $66 billion over the next decade to support farmers, but many benefits will not be realized until the next harvest season [15][16]. Group 4: Future Outlook - The U.S. Department of Agriculture is expected to lower its soybean export forecast for the 2025/26 season due to ongoing trade disputes, with the current estimate at 46.4 million tons, down from 51.02 million tons the previous year [20]. - Despite the challenges, there remains a significant demand for U.S. soybeans from non-Chinese buyers, particularly during the sales season when competition is limited [21]. - The potential for a trade agreement between the U.S. and China could significantly improve the outlook for U.S. soybeans [22].

Group 1 - Asian markets showed mixed results as traders anticipated an interest rate cut by the Federal Reserve this week, with equities experiencing a strong run-up due to favorable job and inflation data [1][2] - The Federal Reserve is expected to lower borrowing costs by 25 basis points, although some analysts suggest a potential cut of 50 basis points, with President Trump expressing support for a significant reduction [2][3] - The tone of the Federal Reserve's policy statement and guidance from Chairman Powell's press conference will be closely monitored, alongside meetings of central banks in Canada, Britain, and Japan [3] Group 2 - Shanghai's market declined due to weaker-than-expected economic data in China, particularly in retail sales and industrial production [4] - The Australian market faced losses, particularly ANZ bank, which agreed to pay a record fine of AUD 240 million (USD 159.5 million) for widespread misconduct [4] - Ongoing trade talks between China and the United States are set to address various issues, including tariffs and the TikTok dispute, with negotiations occurring amid China's investigations into the US semiconductor sector [5]

Market Performance - The Hang Seng Index has achieved a "four consecutive days of gains," surpassing 26,000 points, marking a year-to-date increase of nearly 31% [2] - The Hang Seng Tech Index has also recorded an increase of over 30% year-to-date [2] - Notable gainers among Hang Seng constituents include Lenovo Group (+4%), JD Logistics (+4%), and Sun Hung Kai Properties (+4%), while SMIC and Sunny Optical rose over 2% [2] Financial Performance - According to Galaxy Securities, total revenue for all Hong Kong stocks increased by 0.67% year-on-year in the first half of the year, while net profit attributable to shareholders grew by 3.59% [3] - The revenue growth rates for the Hang Seng Index and the Hang Seng China Enterprises Index were 2.46% and 2.59%, respectively, both showing a decline compared to the previous year's report [3] - The Hang Seng Tech Index showed a stronger performance with a revenue growth of 16.12% and a net profit growth of 19.24% in the first half of 2025 [3] Capital Flows - Continuous inflow of southbound funds has been a key driver for the rise in Hong Kong stocks, with a cumulative net inflow of HKD 979 billion from January to August [4] - The proportion of trading volume from the Stock Connect has been increasing, reaching an average of 55.9% in August [4] - Southbound funds have maintained a net inflow status into September [4] Market Outlook - Analysts from Zhongtai International suggest that the market is currently in a consolidation phase at high levels, with limited room for further valuation expansion [7] - The Chinese economy is showing signs of moderate recovery, with improving domestic demand and a more favorable export structure [7] - Investment strategies should focus on high-certainty earnings technology leaders, semiconductor, AI computing sectors, and interest-sensitive materials [7] Sector Recommendations - Citigroup has raised its year-end target for the Hang Seng Index by 7% to 26,800 points, with further increases expected in 2024 [10] - The report highlights sectors such as technology, healthcare, and insurance as key beneficiaries of China's "14th Five-Year Plan," while downgrading telecommunications and energy sectors due to slow profit growth [10] - Analysts recommend focusing on sectors with relative prosperity and policy benefits, including automotive, new consumption, innovative pharmaceuticals, and technology [8]

Group 1 - The core issue of the trade tensions between the US and China revolves around the strategic importance of rare earth materials, particularly magnets, which are crucial for various high-tech applications [1][5][19] - Trump's recent threat to impose a 200% tariff on Chinese magnets highlights the US's reliance on China for these critical resources, as the US lacks domestic processing capabilities for rare earths [5][12][19] - The US government is considering special tariffs on key products like rare earth permanent magnets, electric vehicle batteries, and solar panels, where China holds a dominant position [5][10] Group 2 - The US has been attempting to reduce its dependence on Chinese rare earths but has faced significant challenges, including failed domestic mining efforts and unsuccessful partnerships with other countries [10][12] - The trade war has led to increased costs for US consumers and businesses, with estimates suggesting that tariffs have raised import costs by over $320 billion [8][10] - Despite the tensions, American companies, particularly in the tech sector, continue to seek opportunities in the Chinese market, indicating the complexity of the economic relationship [17][19] Group 3 - The ongoing trade dispute has entered its sixth year, with both countries adjusting their strategies, and Trump's recent statements may serve as a political maneuver ahead of upcoming high-level talks [15][19] - China's trade diversification strategy is evident, as it has seen a decline in exports to the US while increasing exports to emerging markets [13][19] - The interdependence between the US and China in the rare earth sector underscores the need for both nations to navigate their economic relationship carefully to avoid mutual harm [19]

Group 1 - The American Soybean Association urges the U.S. government to reach an agreement with China to eliminate tariffs and encourage significant purchases of U.S. soybeans, warning of severe long-term economic consequences for U.S. agriculture if China continues to avoid U.S. soybeans [1] - Due to ongoing trade tensions and negotiations, China is accelerating its soybean purchases from Brazil and has not pre-purchased U.S. soybeans for the upcoming harvest, causing concern among traders and farmers [1] - The American Soybean Association highlights the decline in soybean prices while production costs for farmers have significantly increased, putting financial pressure on growers [1] Group 2 - In the 2023-2024 marketing year, China purchased 54% of U.S. soybean exports, totaling $13.2 billion, but the USDA reports a 39% year-on-year decline in U.S. soybean imports from China for the first half of 2025 [2] - The White House states that President Trump is focused on farmers' interests and aims to create a fair competitive environment, having previously urged China to triple its soybean purchases, which led to a temporary price increase [2] - Farmers express skepticism about the feasibility of achieving the target for increased soybean purchases from China [2]

Group 1 - The overall outlook for the Hong Kong stock market remains cautious but optimistic, with a focus on sectors benefiting from policy support such as automotive, new consumption, innovative pharmaceuticals, and technology [3][6] - The market showed resilience in July, with the Hang Seng Index, Hang Seng Index, and Hang Seng Technology Index recording monthly changes of +4.52%, +2.91%, and +2.83% respectively, despite economic pressures [4][14] - All primary sectors in the Hang Seng Index experienced gains in July, particularly the healthcare sector, which surged over 20% due to favorable policies and improved performance [4][14] Group 2 - The macroeconomic environment for the Hong Kong market is characterized by weak fundamentals, a mixed funding environment, and a cautious sentiment among investors [5][6] - The net inflow of southbound funds in July reached a record high of 866.8 billion HKD, surpassing the total for the entire year of 2024, indicating strong demand for Hong Kong stocks [23][24] - The valuation levels of the Hang Seng Index have risen, with a PE (TTM) of 12.04 at the end of July, reflecting a recovery from previously undervalued conditions [19][24] Group 3 - The report highlights the importance of monitoring the impact of U.S.-China trade tensions on sectors with significant exposure to U.S. markets, suggesting a cautious approach to investments in these areas [3][6] - The report emphasizes the need for investors to focus on sectors that are relatively independent of external pressures and benefit from the local economic environment, such as Hong Kong banks, telecommunications, and utilities [3][6]

Core Insights - The recent US-China talks concluded with a strong stance from the Chinese side, indicating potential difficulties for US representatives in explaining the outcomes to the public [1][2] - President Trump has shifted his previous willingness to visit China, now stating he will not seek a meeting unless invited by the Chinese [2] Summary of Key Results - The talks adhered to the consensus reached during the leaders' previous communications, showcasing candid, in-depth, and constructive exchanges [3] - Both teams will maintain close communication moving forward, with a significant outcome being the continuation of the suspension of the 24% tariffs imposed by the US on China, which was set to expire on August 12 [3] - The negotiations highlighted the importance of both nations in the global economy and the need for further efforts and sincerity to resolve trade disputes [5]

Report Summary 1. Report Industry Investment Rating No information provided in the given content. 2. Core View of the Report The global electrolytic copper total inventory continues to accumulate due to factors such as disturbances in overseas copper mine production or transportation, the significant impact of the traditional domestic consumption off - season, and Trump's government's tariff policies. Copper prices may still have downward space. It is recommended that investors hold their previous short positions cautiously and pay attention to the support and resistance levels of Shanghai copper, London copper, and US copper [3]. 3. Summary by Related Content Market Data - **Shanghai Copper Futures**: On July 14, 2025, the closing price of the active contract was 78,430, down 30 from the previous day; the trading volume was 79,136 lots, down 2,530; the open interest was 172,204 lots, down 6,478. The average price of SMW 1 electrolytic copper was 78,720, down 265 [2]. - **London Copper Futures**: The closing price of the LME 3 - month copper futures (electronic) on July 14 was 9,643.5, down 19.5. The total inventory of registered and cancelled warrants was 109,625 tons [2]. - **COMEX Copper**: The closing price of the copper futures active contract was 5.5255, down 0.1. The total inventory was 236,454 tons, an increase of 5,311 tons [2]. Industry News - **CSPT Meeting**: In the second - quarter general manager's office meeting in 2025, CSPT decided not to set a reference figure for the third - quarter spot copper concentrate processing fee due to the serious distortion and unsustainability of the current spot market processing fee [2]. - **US Treasury Plan**: The US Treasury plans to raise its cash reserves to $500 billion by the end of July and September through increasing the scale of weekly standard - fixed - rate bond auctions, which helps reduce market shocks [2]. Upstream Situation - **Copper Concentrate**: China's copper concentrate import index is negative but has increased compared to last week. The world's (China's) port copper concentrate departure (loading, inventory) volume has changed compared to last week. Due to the Sino - US trade dispute, the willingness of traders to accept US scrap copper is low. However, the negative price difference between domestic electrolytic copper and scrap copper makes scrap copper economically viable, and the scrap copper import window may open, but the domestic scrap copper production (import) volume in July may decrease month - on - month, and the supply - demand expectation is tight [3]. - **Smelting Plants**: Some smelting plants have production problems. For example, Glencore's EKSAR copper smelter in the Philippines has stopped production, and Zhongkuang Resources' Suned copper smelter in Namibia has suspended production due to a shortage of copper concentrate supply. Some new smelting plants are expected to be put into production, such as the Kanoa - Tabula smelter in the Congo (Kinshasa) and some domestic projects [3]. Downstream Situation - **Copper Rod**: The processing fee of copper rods for power and cable wrapping in East China has decreased compared to last week. Some copper rod enterprises plan to reduce production and inventory due to high finished - product inventories, but new orders have slightly improved. The capacity utilization rate of refined copper rod and recycled copper rod enterprises has increased compared to last week [3]. - **Copper Wire and Cable**: The capacity utilization rate of copper wire and cable has increased compared to last week. The raw material inventory of copper wire and cable enterprises has decreased, while the finished - product inventory has increased. The order volume and capacity utilization rate of copper cable wrapping have increased, and the raw material and finished - product inventory days of cable - wrapping enterprises have decreased [3]. - **Other Products**: The capacity utilization rate of copper plate and strip has increased, but the downstream demand is weak due to the traditional consumption off - season. The capacity utilization rate of steel pipes has decreased, and the capacity utilization rate of brass rods has decreased. The capacity utilization rate of copper foil may increase or decrease [3]. Investment Strategy Investors are advised to hold their previous short positions cautiously and pay attention to the support and resistance levels of Shanghai copper (76,000 - 78,000 and 80,000 - 83,000), London copper (9,400 - 9,600 and 9,900 - 10,200), and US copper (5.0 - 6.3 and 6.0 - 7.0) [3].

Report Investment Rating No relevant content provided. Core View The expansion of the US fiscal deficit and the Fed's potential interest rate cuts, along with disruptions in overseas copper production and transportation, are countered by Trump's tariff policies and the traditional off - season of domestic consumption. With the continuous accumulation of global electrolytic copper inventory, the price of Shanghai copper may be adjusted. It is recommended that investors lightly build short positions in the main contract, paying attention to specific support and resistance levels for Shanghai copper, London copper, and US copper [4]. Summary by Directory 1. Market Data - **Shanghai Copper Futures**: On July 7, 2025, the closing price of the active contract was 79,270 yuan, down 460 yuan from the previous day; the trading volume was 75,314 lots, a decrease of 25,248 lots; the open interest was 204,506 lots, down 11,232 lots; the inventory was 21,682 tons, a decrease of 625 tons [2]. - **Shanghai Copper Basis and Spot Premium/Discount**: The Shanghai copper basis was 615 yuan, down 190 yuan; the spot premium/discount in Guangzhou was - 5 yuan, down 30 yuan; in North China, it was - 170 yuan, down 20 yuan; in East China, it was - 40 yuan, down 10 yuan [2]. - **Spread (Near - Month vs. Far - Month)**: The spread between the near - month and the first continuous contract of Shanghai copper was 280 yuan, up 20 yuan; between the first and the second continuous contracts was 150 yuan, down 20 yuan; between the second and the third continuous contracts was 250 yuan, down 20 yuan [2]. - **London Copper**: The LME 3 - month copper futures closing price (electronic trading) on July 4, 2025, was 9,852 dollars; the total inventory of registered and cancelled warrants was 97,400 tons; the 0 - 3 - month contract spread was 95.35 dollars, and the 3 - 15 - month contract spread was 5.77 dollars [2]. - **COMEX Copper**: On July 7, 2025, the closing price of the active contract was 5.005 dollars, down 0.19 dollars; the total inventory was 221,456 tons, an increase of 8,285 tons [2]. 2. Industry News - **Domestic**: The second rotary anode furnace of the pyrometallurgical system in the Yunnan - Central Nonferrous Recycled Copper Resources Recycling Base successfully produced the first furnace of anode copper. On July 2, the No. 2 anode furnace in the refining workshop of Yuanqu Smelter was put into operation [2]. - **Overseas**: Glencore's PASAR smelter in the Philippines with a leased capacity of 200,000 tons has shut down; Zhongkuang Resources' Tsuned copper concentrator in Namibia has suspended production; Glencore's Altonorte smelter in Chile has reduced production; the Kakula smelter in Congo (Kinshasa) may be completed and put into operation in June 2025, with an annual output of 500,000 tons of cathode copper [4]. 3. Key Information - **Macro**: The US House - version "Big Beautiful" bill was passed, raising the debt ceiling to 5 trillion dollars, with the fiscal deficit expected to expand by over 3 trillion dollars. The ADP employment number in a certain month was - 33,000, lower than expected, reducing the probability of the Fed not cutting interest rates in July, but the expected time for rate cuts is still September/October/December [3][4]. - **Industry**: China's copper concentrate import index is negative but has increased compared to last week. The supply of high - quality scrap copper in Europe is restricted, and due to the Sino - US trade dispute, traders are reluctant to buy US steel. However, the positive price difference between domestic electrolytic copper and scrap copper may increase the economy of scrap copper, and the scrap copper import window is open. The production and import of domestic scrap copper in July may change, and the supply - demand situation is expected to be tight. The domestic smelter's monthly inspection capacity may decrease, and the production and export of domestic electrolytic copper may increase [4]. - **Downstream**: Some copper rod enterprises plan to reduce production and inventory in July due to high finished - product inventory. The operating rates of copper wire and cable, copper strip, copper pipe, and brass rod industries have decreased, and the inventory of raw materials and finished products in these industries has changed accordingly [4].