Hang Seng Index rises for fourth straight session, stabilizing above 25,800; domestic banks and oil stocks support the market—high-yield defensive stocks attract capital flows; consider ChinaAMC Asia High Dividend Yield ETF

The Federal Reserve announced it would hold rates steady, but three voting members dissented, intensifying market focus on the Fed's September rate decision. U.S. equities dropped sharply overnight, yet Hong Kong stocks remained relatively stable on futures expiry day. The Hang Seng Index rose early to an intraday high of 25,971, approaching the 26,000 mark before pulling back to a low of 25,657. In the afternoon, news emerged of a Politburo meeting, reigniting market momentum, and the index closed firmly above 25,800. The Hang Seng Index ended at 25,858, up 0.2%, marking its fourth consecutive gain, with total turnover reaching HK$304.8 billion. The H-share Index rose 0.2% to close at 8,644. The Hang Seng Tech Index declined 1.3% to 4,803. Southbound capital recorded a net outflow of RMB 8.57 billion, marking the sixth straight day of net outflows.

Fed Chair Waller reiterated the 2% inflation target, and coupled with his hawkish remarks, financial stocks showed mixed performance today. HSBC $HSBC HOLDINGS (00005.HK)$ (0005) fell 0.12%, closing at HK$164.5; Standard Chartered $STANCHART (02888.HK)$ (2888) dropped 0.2% to close at HK$231; AIA $AIA (01299.HK)$ (1299) gained 1.9% to close at HK$79.65. Mainland insurers also attracted capital inflows, with Ping An $PING AN (02318.HK)$ (2318) rose 1.3%, closing at HK$58.7; China Life Insurance $CHINA LIFE (02628.HK)$ (2628) gained 2% to close at HK$28.9.

The Politburo meeting was held, and mainland bank stocks saw noticeable capital inflows in the afternoon. Agricultural Bank of China $ABC (01288.HK)$ (1288) rose 3% to close at HK$6.51; ICBC $ICBC (01398.HK)$ (1398) gained 2.1% to close at HK$7.64; China Construction Bank $CCB (00939.HK)$ (0939) rose 1.6% to close at HK$9.36; Bank of China $BANK OF CHINA (03988.HK)$ Bank of China (3988) rose 1.1% to close at HK$5.54, with all four major mainland banks hitting new intraday highs. However, policy expectations from the Politburo meeting provided limited support to consumer stocks, including Nongfu Spring. $NONGFU SPRING (09633.HK)$ Nongfu Spring (9633) gained 1.5% to close at HK$45.56; Mengniu Dairy $MENGNIU DAIRY (02319.HK)$ (2319) rose 0.5% to close at HK$19.42; Li Ning $LI NING (02331.HK)$ (2331) dipped slightly by less than 0.1% to close at HK$15.26; Anta Sports $ANTA SPORTS (02020.HK)$ (2020) edged down less than 0.1% to close at HK$79.60; Haidilao $HAIDILAO (06862.HK)$ (6862) was flat, closing at HK$11.96.

Large-cap tech and internet stocks diverged in performance. Tencent $TENCENT (00700.HK)$ (0700) reportedly began internal testing of its AI-generated content creation platform WorkSolo, and its share price rose 1.2% to close at HK$471.80; NetEase $NTES (09999.HK)$ (9999) climbed 1.7% to close at HK$206.60; JD.com $JD-SW (09618.HK)$ (9618) advanced 2% to close at HK$128.70; Meituan $MEITUAN-W (03690.HK)$ Meituan (3690) rose 0.4% to close at HK$92.65; Alibaba $BABA-W (09988.HK)$ (9988) fell 1.6% to close at HK$111.80; Xiaomi $XIAOMI-W (01810.HK)$ (1810) dropped 2.6% to close at HK$31.04.

However, selling pressure on global AI hardware stocks continued, with the Philadelphia Semiconductor Index falling over 5% overnight, keeping Hong Kong-listed chip and AI infrastructure stocks under pressure. SMIC $SMIC (00981.HK)$ (0981) plunged 7.7% to close at HK$62, making it the worst-performing blue chip; Hua Hong Semiconductor $HUA HONG GRACE (01347.HK)$ (1347) tumbled 8.3% to close at HK$125.50; Montage Technology $MONTAGE TECH (06809.HK)$ (6809) declined 6.8% to close at HK$251.40; GigaDevice $GIGADEVICE (03986.HK)$ (3986) fell 1.9% to close at HK$428.20; TianShu ZhiXin $ILUVATAR COREX (09903.HK)$ (9903) slumped 14.7% to close at HK$377. AI software stocks also faced selling pressure, with Zhipu $Z.AI (02513.HK)$ (2513) dropping 16.6% to close at HK$861.80; MiniMax $MINIMAX-W (00100.HK)$ (0100) fell 4.2%, closing at HK$203.80; XunCe $XUNCE (03317.HK)$ (3317) dropped 5.9%, closing at HK$97.90.

PCB and optical communication sectors were not spared from declines, with Cambridge Technology $CIG (06166.HK)$ (6166) plunging 12.9%, closing at HK$61.80; Yangtze Optical Fibre $YOFC (06869.HK)$ (6869) down 10.5%, closing at HK$92.00; KB Laminate $KB LAMINATES (01888.HK)$ (1888) falling 7.6%, closing at HK$29.14; Kingboard Group $KINGBOARD HLDG (00148.HK)$ (0148) declined 3.6%, closing at HK$40.08; Sunway Technology $VGT (02476.HK)$ (2476) dropped 5.6%, closing at HK$168.30; Sicon Microelectronics $CFMEE (09630.HK)$ (9630) tumbled 17.4%, closing at HK$229.00; Lenovo Group $LENOVO GROUP (00992.HK)$ (0992) fell 5.4%, closing at HK$21.74; Sunny Optical $SUNNY OPTICAL (02382.HK)$ (2382) fell 6.5%, closing at HK$57.2.

Biotech stocks also weakened, becoming another major sector with significant capital outflows for the day. Wuxi Bio $WUXI BIO (02269.HK)$ (2269) dropped 4%, closing at HK$37.8; Wuxi Apptec $WUXI APPTEC (02359.HK)$ (2359) declined 0.6%, closing at HK$157.7; Akeso $AKESO (09926.HK)$ (9926) dropped 2.6%, closing at HK$93.2; Innovent Bio $INNOVENT BIO (01801.HK)$ (1801) dropped 1.8%, closing at HK$88.1; BeiGene $BEONE MEDICINES (06160.HK)$ (6160) declined 1.5%, closing at HK$196.1; Kelun-Biotech $SKB BIO (06990.HK)$ (6990) fell 3.3%, closing at HK$481; Hansoh Pharmaceutical $HANSOH PHARMA (03692.HK)$ (3692) declined 3.5%, closing at HK$32.34; Sinopharm Group $SBP GROUP (01177.HK)$ (1177) declined 3.3%, closing at HK$5.06.

On individual stocks, New Oriental $NEW ORIENTAL-S (09901.HK)$ (9901) received positive ratings from multiple major brokerages following its full-year earnings announcement. Goldman Sachs raised its target price to HK$55, and the stock rose 18.8% to close at HK$47.44, making it the best-performing blue chip of the day; JD Logistics $JD LOGISTICS (02618.HK)$ (2618) gained 3.6%, closing at HK$15.16; Budweiser APAC $BUD APAC (01876.HK)$ (1876) reported interim profit growth of over 15%, and its share price rose 1.7%, with major banks also issuing bullish comments; MGM China $MGM CHINA (02282.HK)$ (2282) was upgraded by brokerages post-earnings, climbing 3% to close at HK$11.34; Fosun International $FOSUN INTL (00656.HK)$ (0656) rose 7.9% to close at HK$4.79, with Citi expecting improved first-half earnings; newly listed InnoLight Technology $ZJ INNOLIGHT (03308.HK)$ (3308) closed at HK$960 on its debut, down 2% from its IPO price.

Recently, high-dividend defensive stocks have continued to attract capital inflows. Investors may consider paying attention to Harvest Asia High Dividend Equity ETF $ChinaAMC Asia High Dividend ETF (03145.HK)$ (3145): The ETF closed at HK$14.690 today, down 0.204%. It focuses on high-dividend Asian equities, with holdings not limited to Hong Kong but also spanning mainland China, Southeast Asia, South Korea, and Taiwan. The fund currently follows the Bloomberg Asia Pacific High Dividend Yield 40 Index methodology, prioritizing companies with higher expected dividend yields and robust return on equity. Geographic, sectoral, and currency diversification help mitigate single-market risk. Key sectors include banks, telecommunications, energy, shipping, and consumer goods—mature industries with relatively stable cash flows. Examples include HKT $HKT-SS (06823.HK)$ (6823), Tingyi $TINGYI (00322.HK)$ (0322), COSCO Shipping Energy (1138) $COSCO SHIP ENGY (01138.HK)$ and SITC International $SITC (01308.HK)$ (1308), along with leading bank stocks in Indonesia and Thailand. Consequently, its performance depends not only on Hong Kong market conditions but also on regional factors across Asia, including interest rates, exchange rates, corporate earnings, and dividend policies. The fund targets monthly distributions, with the manager selecting stocks based on expected dividends rather than solely historical payout records, aiming for an annualized distribution yield of at least 8%. However, distributions are not guaranteed and may vary depending on market conditions, portfolio performance, and the fund manager’s discretion. The next ex-dividend date is August 12, with a distribution of HK$0.10 per unit. Investors interested in this distribution should ensure they hold units before the ex-dividend date. Recent disclosures confirm the latest monthly distribution remains at HK$0.10, making it suitable for investors seeking a single ETF to gain diversified exposure to high-yield Asian equities, prioritize regular cash flow, and tolerate equity market and currency volatility.

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