How to view the post-holiday market trend in Hong Kong stocks?
February 3rd [BOC Guest]: Hang Seng Index, China Mobile, Zijin Mining, Zijin Gold International, Pop Mart, Xiaomi Group
Simon: Hi Niki, it's Tuesday again. We can chat about Hong Kong stocks and talk about the current situation of CBBCs. Thank you so much for taking time out of your busy schedule every week to join us. These past two days have been incredibly hectic, with significant market fluctuations.So I’d like to ask, regarding the Hang Seng Index, which has seen relatively large fluctuations recently, including today. From your perspective as an issuer, what advice do you have for CBBC investors given the current volatile market conditions?
Niki, Director at BOC International: Yes. In fact, over the past couple of days, everyone has truly felt how the rise or fall of one or two sectors can impact the overall investment sentiment and mood of the entire market. Therefore, investors should closely monitor market dynamics at this time. For instance, by using the Hang Seng Index bull/bear certificate street-level distribution chart, we can roughly assess whether investors are mainly buying long positions at lower levels or still maintaining a bearish stance after the market drops by 800 points. Once you have a basic judgment on this, it becomes relatively easier to predict future market trends. Why don’t you visit our website? Let me repeat, our website is (www.bocifp.com). There’s a section called 'Options' where you can find the bull/bear certificate distribution chart. I really recommend checking it out today. You’ll see that the red area represents the percentage of short positions (bear certificates), which has reached 24%; while the golden yellow area below indicates the proportion of bull certificates at approximately 76%. This 76% ratio is the highest level I've seen in nearly half a year. It means that once the market fell to around 26,500 points, investors became quite keen on buying at the bottom, expecting a rebound. Hence, you'll notice that 76% of funds are concentrated in bull certificates, with the heavy accumulation zone holding nearly 1,100 index futures contracts per 100 points. Thus, it shows that many believe there will be certain support when the market falls to around 26,000 points, inferred from investor views via the Hang Seng Index bull/bear certificate street-level data.
Therefore, we can see that investors are willing to buy at lower levels. So, although yesterday the market dropped by 800 points and many large-cap stocks or various industry sectors saw noticeable adjustments, investors were actually buying. However, I must remind everyone that since the beginning of this year, particularly from January, as I’ve mentioned on the program before, we’ve noticed that global financial markets entering this year have been significantly influenced by international news and commodity price movements, affecting investors’ nerves. As a result, the volatility in major indices has notably increased, often moving by about 800 points. Thus, in such a highly volatile market, caution is required when entering trades. Truly wait until the market stabilizes after a drop before betting on a rebound; don't hastily assume the decline is over after just a couple of hundred points. I suggest looking at the heavy accumulation zones of related bull certificates, assessing whether they might fall near those areas, and then considering betting on a rebound, which would yield relatively higher success rates. Because overall market volatility is genuinely substantial.
Thus, regarding the index, both yesterday and today (the 3rd), we’ve provided some relatively close-to-the-money tools for everyone. Since the market fell back from 28,000 points to around 26,000 points in just a short span of one to two weeks, market volatility has expanded. Regarding products, you can check out our website for more information. For example, we offer two bull certificates with recovery prices close to 26,400 points; one of them has the code 60960. $BI#HSI RC2809S.C (60960.HK)$ , the other code is 60495 $BI#HSI RC2809P.C (60495.HK)$ 。
As for bear warrants, there are also two options available for investors to choose from. The stop-loss levels are at 27,100 points and 27,200 points, with codes 62722 $BI#HSI RP2803X.P (62722.HK)$ and 62750 $BI#HSI RP2803Y.P (62750.HK)$ . These products will be updated according to current market conditions, so we recommend closely monitoring our website or using the search function on the site to find the right tools for you.
Simon: As Niki just mentioned, since entering this year, market volatility has indeed increased, whether it's daily fluctuations or movements over a period of time, they have been quite significant. This year’s market environment won’t be so one-sided; sometimes the swings can be very large.At this point, frankly speaking, investors should refer to the product information we provide when the market opens. If there are any questions after trading begins—especially within the first 15 minutes to half an hour—and if substantial market fluctuations occur, many investors may want to consult more closely with issuers. Is this the period when investors call you the most?
Niki, Director of BOC International:Yes, because sometimes investors have questions about the pricing of products, or see that the market is changing too quickly and want to find the most suitable tool as soon as possible. In such cases, the quickest way is to call us. We can immediately analyze the data in our system and then offer recommendations tailored to the investor’s needs. So whether it’s morning or afternoon trading hours, feel free to call us if you have any questions. Warrant Hotline: +852 3988 6909,to contact colleagues at BOC International who will answer your questions.
Simon: So everyone might as well remember this phone number. When the market is volatile, practical information becomes even more critical. If you have any questions after the market opens, you can call the Warrant Hotline at 3988 6909.
Simon: Let's talk about individual stocks. The first one I want to discuss with Niki is China Mobile (00941).You can see that China Mobile's stock price has had some minor fluctuations. Yesterday (2nd), it hit a low of 75.85 yuan, but today it has rebounded somewhat. I want to ask, has there been capital starting to bet on a rebound or purchasing some call warrants during this period?
Niki, Director of BOC International:In fact, there was news released yesterday morning that the VAT rate for mainland telecom operators increased from around 6% to 9%. After the related news came out, several telecom companies responded and confirmed the situation, and the market is also paying close attention to whether the increase in tax rates will affect the company’s revenue and profitability. Therefore, the adjustment in telecom-related stocks yesterday was quite noticeable, but today, the market condition has stabilized somewhat.
Take China Mobile as an example; yesterday it went as low as around 75 yuan, and today it rebounded relatively to about 78.5 yuan. Overall, there was significant capital inflow into China Mobile's bullish products yesterday. In terms of product selection, investors mostly chose China Mobile's call warrant 24413 as a deployment to bet on a rebound. Its strike price is 88.88 yuan, expiring at the end of September this year, with leverage of approximately 13 times. Investors who are bearish can refer to China Mobile's put warrant 21625, with a strike price of 75.83 yuan, expiring around mid-April this year, offering relatively higher leverage, close to 20 times. So, there has been a lot of news surrounding the telecom sector recently, and you can pay attention to related investment tools.
Simon: As just mentioned, China Mobile’s put warrant 21625,$BI-CMOB@EP2604A.P (21625.HK)$with a strike price of 75.83 yuan, yesterday’s low was actually quite close to this price. Therefore, investors who remain bearish can refer to this one. For those bullish, there is a product with a relatively longer expiration date, still more than half a year away, code 24413, with a slightly higher strike price of around 88 yuan, offering leverage of 12 times. For call warrants, 12 times leverage is a reference-worthy product. So if you're interested, you can check the latest product information on the Bank of China International website.$BI-CMOB@EC2609A.C (24413.HK)$The exercise price is slightly higher, around 88 yuan, with a leverage of 12 times. For call warrants, a leverage of 12 times is a product worth considering. So if anyone is interested, you can pay attention to the latest product information on the Bank of China International website.
Simon: Next, I’d like to talk to Niki aboutanother individual stock, Zijin Mining (02899). You can see that today (3rd), Zijin Mining's stock price rebounded somewhat, and currently, on the daily chart, it is above the Bollinger Band. Actually, over these two days, have investors regained some confidence in it and started buying its related call warrants?
Niki, Director of BOC International:Actually, we've previously discussed the topic of gold prices with everyone. Recently, the rise in gold prices has indeed made some breakthroughs. In just one month, international gold prices have risen by nearly 30%, which has surprised the market. The price of any product cannot only rise without falling, so given such a rapid increase, the risks for the future market are actually growing. How should investors position themselves in this situation? I always believe that in the short term, due to the rapid rise, if you want to make short-term trades, the risk would be very high. I would remind everyone that if you intend to engage in ultra-short-term speculation, it may not be a good time. Since gold prices are already at historical highs with large fluctuations, even slight changes could lead to pullbacks from high levels, like silver prices dropping almost 40% in the past couple of days. So, be cautious about short-term volatility.
However, if you're considering long-term deployment, then during such market adjustments, some investors may choose to enter the market. So it all depends on your view of gold prices. If you're looking for short-term trading, I would actually advise against entering the market at this time, as it's difficult to pinpoint the best timing for an upward movement. After all, with a 30% increase in just one month, the probability of further gains is relatively low, while the likelihood of a pullback is higher. For a medium to long-term perspective, after considering factors like global central banks' attitudes towards gold and the future trend of the US dollar, if you still wish to invest long-term, be mentally prepared for potentially significant short-term volatility. But as long as you're not into short-term trading but rather long-term investment, now could be a good entry point.
So in terms of product tools, you can see that we provide many relevant instruments, such as paper gold, international gold-related products, and the 2840 Gold ETF. Therefore, you can choose according to your needs. After all, the profits of paper gold or listed companies like Shandong Gold will be affected by their own operating costs and other factors. However, if you're purely speculating on the price of gold, 2840 $SPDR Gold Trust (02840.HK)$ products like these are more closely aligned. For example, today, when gold prices rebounded close to $4,900 per ounce, investors will find that buying products like 2840, which purely track gold prices, offers higher alignment. So it all depends on how you want to enter the market.
Of course, if speculators are looking for leveraged instruments with lower operational costs and don’t require large capital, such as Zijin Mining-related call warrants, they can refer to the tools on our website, such as code 21590 $BIZIJIN@EC2604B.C (21590.HK)$ the call warrant with an exercise price of 48.6 yuan, expiring in mid-April this year, offering leverage of about 7 times. As for Gold International (02259)-related products, you can pay attention to code 24632 $BIZJGLD@EC2607B.C (24632.HK)$ with an exercise price of 209 yuan, expiring in early July this year, providing leverage of approximately 4 times.
Simon: Actually, as mentioned earlier, every investor facing market fluctuations needs to clarify whether their strategy is for short-term speculation or medium to long-term holding. Once the investment direction is determined, it’s more important to visit the BOC International website and use the warrant search function to select suitable products based on your strategy. Many times, investors mismatch their positions—for instance, choosing long-dated products for short-term trades, or selecting short-term high-leverage products for long-term holding. Hence, everyone should really compare product terms. If you find it complex, as previously suggested, you can call BOC International’s Warrant Hotline to consult with Niki or her team colleagues to learn about which products are relatively suitable in the current market. Everyone can benefit from exchanging ideas and communicating.
Simon: Next, I’d like to discuss with Niki another stock, Pop Mart (9992). Looking at recent trading days, Pop Mart's share price has been relatively stable. In the currently volatile market environment, might there be more capital inflow into Pop Mart in the warrant market?
Niki, Director of BOC International:Pop Mart was also one of the preferred consumer brand stocks last year. Since the beginning of this year, we've indeed seen frequent news about the company’s expansion. For example, yesterday it was mentioned that Pop Mart plans to establish its European headquarters in London, UK, and intends to open 7 new stores in the UK to meet the strong market demand for its products. The UK already has representatives for Pop Mart. So even though the Hong Kong stock market has been quite volatile recently, dropping over 800 points, Pop Mart has managed to rise against the trend. These developments indicate that the market views Pop Mart’s moves quite positively.
So in terms of market instruments, we also have a pair of products for everyone to consider. If you continue to be optimistic about the future performance of Pop Mart, with the current stock price around 230 yuan, you may consider some slightly out-of-the-money products, such as Pop Mart's call warrant 22285. $BIPOMRT@EC2604B.C (22285.HK)$ The strike price is around 260 yuan, expiring around mid-April this year, with leverage of approximately 6 times. As for Pop Mart's put warrants, you can look at code 21876. $BIPOMRT@EP2604A.P (21876.HK)$ This product has a strike price of 209.85 yuan, expiring in mid-April this year, and its leverage is also about 6 times.
Simon: So, based on your investment preferences, you may want to consider. The share price of Pop Mart has been relatively strong recently. Of course, further judgment is needed regarding its subsequent trend.
Simon: Before we conclude today,Let’s talk about another underlying stock, Xiaomi (01810), whose stock price has always been somewhat disappointing. You can see that Xiaomi's stock price has remained relatively low recently. What does investor confidence look like for Xiaomi in the CBBC market?
Niki, Director of BOC International:Indeed, you can see that Xiaomi's stock price has been falling from around 60 yuan last year, and recently it broke below the previous low. The previous low was 34.5 yuan, and now it has dropped to around 34.36 yuan. Recently, some auto peers announced last month’s sales data, showing that different brands are facing an issue where January sales declined compared to the same period last year. Therefore, the market is paying close attention to the industry situation, whether competition has intensified again or if consumer enthusiasm for new product purchases and sales figures are not particularly ideal.
As a result, there is significant attention on Xiaomi, and you can see that its share price continues to hover at low levels. Although the company announced a 2.5 billion yuan stock repurchase plan, which is a large scale compared to last year, it's worth noting that Lei Jun previously contributed personal funds for buybacks, and the company has also gradually conducted repurchases. However, although a 2.5 billion yuan repurchase has been announced, the share price still needs time to reflect this. On the other hand, investors remain active on both sides. Those who are optimistic believe that the company's allocation of such substantial funds for repurchasing indicates confidence in long-term development. Thus, there has been relatively more capital inflow into Xiaomi's call warrants recently. For example, you may consider Xiaomi's call warrant under code 24845. $BIXIAMI@EC2607C.C (24845.HK)$ This product has a strike price of 43.88 yuan, expiring by the end of July this year, with leverage of nearly 6 times. For those who remain bearish on the medium to long term, you may refer to Xiaomi's put warrant 22284. $BIXIAMI@EP2606D.P (22284.HK)$ The strike price is 27.8 yuan, expiring by the end of June this year, with leverage of around 6 times.
Simon: Actually, I want to ask Niki again,With stock prices fluctuating between high and low, could you mention the hotline number again? Given the market volatility, everyone is quite concerned or worried, whether it’s about the movement of the underlying stocks or noticing that some stocks have dropped significantly. Are there other key areas or sectors worth paying attention to? Often, we all have various questions—including myself—I ask for your advice every week on the current hot sectors. So, would you mind repeating the phone number again? It would make it easier for everyone to reach out if they have any concerns.
Niki, Director of BOC International:Sure! Our hotline is actually set up for everyone to call in for consultations. For example, you can inquire about how a product you previously purchased is performing now, whether there are any recommendations, or if there are other suitable tools you can refer to. The fastest way is to call me directly. Of course, we also welcome everyone to visit our website, enter their preferred product terms, and choose the right product. Regarding the phone number, let me repeat it again so you can take note: Warrant Hotline: 00+852 3988 6909。You can call me or my colleagues during Hong Kong stock trading hours, and we will answer your questions.
Simon: Yes, as you mentioned earlier, investors can check product searches on the website. In addition to product searches, they can also look at the featured news on the homepage. For example, today's news related to Macau stocks has been a market focus, along with some automotive stocks and even Alibaba-related news. This information can be accessed more quickly on BOCI’s website. Time is almost up for today. We know that under volatile market conditions, Niki tends to be very busy—whether it’s answering calls, launching products, or monitoring product performance. Issuers are indeed quite occupied. So, thank you very much, Niki, for taking the time, and hopefully, we can chat with you again next week. Thank you, bye-bye.
Disclaimer: This article does not constitute any investment advice.
This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.
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