Hang Seng Index rises 62 points, holding above the 250-day moving average; AI and PCB stocks lead gains. For those seeking both price appreciation and dividends, consider the newly listed CSOP KOSPI 200 Covered Call Option Active ETF.
The U.S. and Iran may reach an agreement to reopen the Strait of Hormuz, boosting global risk appetite. U.S. stocks rose for a fourth consecutive day, with the Dow Jones and S&P 500 hitting new record highs. The Hang Seng Index opened 38 points higher this morning and traded mixed, briefly dipping to 25,729 early on. It later strengthened alongside A-shares, reaching an intraday high of 25,973, but failed to hold above the 26,000 mark. It closed at 25,915, up 62 points or 0.24%, remaining above the 250-day moving average of approximately 25,727. Main board turnover rose to HK$278 billion. The Hang Seng China Enterprises Index closed at 8,603, up 29 points or 0.34%. The Hang Seng Tech Index gained 47 points or 0.97%, closing at 4,933—its fourth straight day of gains. Southbound capital turned net outflow of about RMB 1.4 billion, ending two consecutive days of net inflows.
Alibaba $BABA-W (09988.HK)$ (9988) rose 1.83% to close at HK$128.10, marking its fourth consecutive day of gains; Tencent $TENCENT (00700.HK)$ (0700) rose 0.94% to close at HK$492.20; Baidu $BIDU-W (09888.HK)$ (9888) rose 1.63% to close at HK$112.00; Meituan $MEITUAN-W (03690.HK)$ (3690) rose 0.38% to close at HK$93.05; Xiaomi $XIAOMI-W (01810.HK)$ (1810) fell 1.14% to close at HK$27.64. Sentiment toward AI-related stocks improved, with MiniMax $MINIMAX-W (00100.HK)$ (0100) surging 10.25% to close at HK$253.80; Zhipu $Z.AI (02513.HK)$ (2513) rose 3.07% to close at HK$1,041.00.
AI-related stocks, hardware, and chip stocks led the gains. MiniMax $MINIMAX-W (00100.HK)$ (0100) surged 10.25% to close at HK$253.80; Zhipu $Z.AI (02513.HK)$ (2513) rose 3.07%, closing at HK$1,041; SMIC $SMIC (00981.HK)$ (0981) rose 4.13%, closing at HK$68; Hua Hong Hongli $HUA HONG GRACE (01347.HK)$ (1347) rose 4.74%; Montage Technology $MONTAGE TECH (06809.HK)$ (6809) rose 2.97%, closing at HK$270.4; GigaDevice $GIGADEVICE (03986.HK)$ (3986) rose 5.7%, closing at HK$486; Biren Technology $BIREN TECH (06082.HK)$ (6082) rose 12.93%, closing at HK$37.9; Axera Tech $AXERA (00600.HK)$ (0600) surged 18.27%, closing at HK$14.89; Foxconn Interconnect Technology $FIT HON TENG (06088.HK)$ (6088) rose 17.25%, closing at HK$6.185, as the market anticipates its CPO solutions to ramp up in the second half of the year. However, Zhongji InnoLight $ZJ INNOLIGHT (03308.HK)$ (3308) was dragged down by news that the U.S. plans to restrict Chinese data center components, falling over 16% intraday before paring losses to close down 5.18% at HK$1,116; Cambridge Technology $CIG (06166.HK)$ (6166) also fell 4.7%, closing at HK$82.15.
The PCB and optical communications sectors stood out, rebounding along with the broader market. Yangtze Optical Fibre $YOFC (06869.HK)$ (6869) was initially sold off in early trading but later strengthened, closing up 14.58% at HK$121; Sunway Technology $VGT (02476.HK)$ (2476) surged 16.18%, closing at HK$221.2; Fulltronics $CFMEE (09630.HK)$ (9630) rose 14.84%, closing at HK$356; Kingboard Laminates $KB LAMINATES (01888.HK)$ (1888) gained 10.28%, closing at HK$34.32; Kingboard Chemical $KINGBOARD HLDG (00148.HK)$ (0148) rose 6.42%, closing at HK$44.74; Han's CNC $HANS CNC (03200.HK)$ (3200) advanced 4.02%, closing at HK$108.6.
Among other stocks, Techtronic Industries $TECHTRONIC IND (00669.HK)$ (0669) reported a 17.5% year-over-year increase in interim net profit to US$740 million and raised its dividend by 20%. The stock rose 8.12% to close at HK$143.8, hitting a record high. Lenovo Group $LENOVO GROUP (00992.HK)$ (0992) is set to launch an AI-powered gaming tablet this month; its shares rose 5.87%, closing at HK$26.28; Cathay Pacific $CATHAY PAC AIR (00293.HK)$ (0293) announced a 71% year-on-year increase in interim net profit to HK$6.24 billion, raised its dividend by 30% to HK$0.26, and its share price rose 2.78% to close at HK$14.80; Wynn Macau $WYNN MACAU (01128.HK)$ (1128) gained 3.09% to close at HK$5.83, supported by strong quarterly results that drew positive views from major banks; HSBC Holdings $HSBC HOLDINGS (00005.HK)$ (0005) saw Citi downgrade its rating from 'Buy' to 'Neutral' after yesterday’s quarterly results, citing share buybacks below expectations. UBS Group also maintained a 'Neutral' rating, noting that although HSBC's earnings beat forecasts, its buyback plan and full-year net interest income guidance were insufficient to drive market re-rating. The stock plunged sharply in the afternoon session, closing down 2.64% at HK$162.10, making it the worst-performing blue chip; Innovent Bio $INNOVENT BIO (01801.HK)$ (1801) saw its product revenue for the first half significantly exceed expectations according to CLSA, with its share price rising 4.15% to close at HK$90.30; China Modern Dairy $CH MODERN D (01117.HK)$ (1117) rose 9.15% to close at HK$1.73, hitting a record high.
Easing tensions in the Middle East pushed oil prices lower, with Brent crude futures falling below USD 80 per barrel. CNOOC $CNOOC (00883.HK)$ (0883) fell 2.63% to close at HK$22.96; PetroChina $PETROCHINA (00857.HK)$ (0857) dropped 1.61% to close at HK$9.49; Sinopec $SINOPEC CORP (00386.HK)$ (0386) declined 0.46% to close at HK$4.325. On the other hand, a weaker US dollar lifted spot gold prices above USD 4,100 per ounce, driving broad gains across metals and mining stocks. CMOC Group $CMOC (03993.HK)$ (3993) surged 8.65% to close at HK$18.47, marking the biggest gainer among blue chips; Zijin Mining $ZIJIN MINING (02899.HK)$ Zijin Mining (2899) rose 6.41%, closing at HK$35.20; Zhaojin Mining $ZHAOJIN MINING (01818.HK)$ (1818) rose 7.46%, closing at HK$22.76; Lingbao Gold $LINGBAO GOLD (03330.HK)$ (3330) rose 10.56%, closing at HK$21.56; China Gold International $CHINAGOLDINTL (02099.HK)$ (2099) rose 13.11%, closing at HK$205.40; Zijin Gold International $ZIJIN GOLD INTL (02259.HK)$ (2259) rose 10.16%; Wanguo Gold $WANGUO GOLD GP (03939.HK)$ (3939) rose 11.7%, closing at HK$11.55; among retail gold stocks, Laopu Gold $LAOPU GOLD (06181.HK)$ (6181) rose 6.71%, closing at HK$340.20; Chow Tai Fook $CHOW TAI FOOK (01929.HK)$ (1929) rose 0.94%, closing at HK$11.86.
Although external market performance in July was less than ideal, and South Korea's KOSPI index fell sharply from its highs, CSOP Asset Management launched Hong Kong’s first actively managed covered call ETF linked to the KOSPI 200 Index (3537) at the end of July. $CSOP KOSPI 200 Covered Call Active ETF (03537.HK)$ The ETF employs a synthetic representative sampling strategy, primarily gaining exposure to the index through KOSPI 200 futures and selling KOSPI 200 index call options to collect option premiums, aiming to achieve monthly distributions with an initial target annualized distribution yield of approximately 30%. Details of the latest distribution are yet to be announced. With the KOSPI 200 Index’s annualized volatility recently rising to around 60%, higher market volatility typically allows for higher premiums from selling call options, making such covered call strategies more attractive as an income source in volatile markets. However, the fund’s price will still fluctuate significantly with Korean equities, and investors should not regard the target distribution yield as a guaranteed return.
South Korean stocks broadly advanced today, with the KOSPI 200 rising nearly 4%. The CSOP Korea Covered Call Active ETF (3537) closed at HK$9.06, up 3.01%. JPMorgan maintained its optimistic view on SK Hynix $SK hynix (SKHY.US)$ and the memory sector outlook, noting strengthening revenue momentum from cloud and AI model labs, which indicates improving returns on AI-related capital expenditures. The firm remains positive on the 'higher for longer' multi-year earnings sustainability but lowered its target P/E ratio from 8x to 7x, reducing the price target from KRW 3 million to KRW 2.75 million, reflecting that valuation normalization will still take time. JPMorgan views the recent pullback as a buying opportunity and expects SK Hynix’s Q3 server DRAM average selling prices (ASPs) to outperform peers. Additionally, rising contributions from HBM4 are expected to support blended DRAM ASPs above the industry average, potentially benefiting the KOSPI 200 index directly. This ETF currently charges a management fee of 0.99%, trades in board lots of 100 units, and has an entry threshold of approximately HK$900, making it more suitable for investors seeking exposure to South Korea’s core equity market while prioritizing monthly cash flow and willing to tolerate cyclical volatility in Korean equities and the semiconductor sector. For those aiming solely to capture long-term upside in Korean equities without sacrificing potential gains, a traditional passive Korea-focused ETF may better suit their needs.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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