Hong Kong's equity market experienced a subdued session on June 17th, with the benchmark Hang Seng Index edging lower while the Hang Seng Tech Index managed to close in positive territory.
The Hang Seng Index concluded at 24,312.16 points, declining by 181.79 points or 0.74%. In contrast, the Hang Seng Tech Index finished at 4,669.07 points, gaining 10.42 points for a 0.22% increase.
A Surge in Listings
The market's attention was captured by a significant wave of initial public offerings. Six companies commenced their share offering processes on the Hong Kong exchange today, with a scheduled joint listing date of June 26th. This batch of listings is anticipated to raise a combined total of approximately HK$19.8 billion. Including five other companies that began their offerings earlier, the exchange is preparing for a total of 11 new listings next week, expected to raise around HK$25.1 billion collectively.
The companies launching their offerings today include Lingyi iTech, SG Micro, Xintec, Wenge Technology, Koto Holdings, and Merdeka Gold-DRS. Among them, Lingyi iTech, SG Micro, and Xintec are pursuing dual primary listings in both the A-share and Hong Kong markets. Merdeka Gold-DRS represents a secondary listing of an Indonesian company via depositary receipts. Wenge Technology and Koto Holdings are conducting their offerings under the Chapter 18C rules for specialized technology companies.
Sector Performance Highlights
In other market developments, semiconductor stocks showed broad strength. Montage Tech (HKEX: 06809) surged more than 11%, while Hua Hong Grace surged over 8%, and GigaDevice jumped more than 14%.
Analysts at Huatai Securities noted that domestic AI chip manufacturers are entering a favorable pricing environment, driven by rising upstream costs and a supply-demand imbalance in local computing power. They believe these firms retain pricing power and the ability to pass on costs, with profitability expected to improve as scale advantages materialize.
Leading AI model company Knowledge Atlas (HKEX: 02513) soared over 12%, reaching a new closing high since its listing. The company announced the launch and open-sourcing of its GLM-5.2 model, which reportedly achieved top performance among globally available models in a large-scale blind test. The model's online inference relies on several domestic computing platforms.
Across other sectors, technology and internet stocks were mixed. Lenovo fell over 2%, while Kuaishou gained more than 7%. Automobile stocks were among the session's laggards, with Seres declining over 5%. Oil and gas shares continued their weak performance, with Shandong Molong dropping more than 6%. Newly listed SENASIC (HKEX: 06675) had a strong debut, surging over 127% on its first trading day.
On the capital flow front, southbound investment continued to record a small net outflow from Hong Kong stocks, with a net sell-off exceeding HK$3.2 billion by the market close.
Market Outlook Analysis
Looking ahead, the latest analysis from Haitong International's Zhang Yidong team suggests the recent market "summer chill" was primarily driven by tensions surrounding the Strait of Hormuz. This situation impacted global risk appetite in the short term and, through its effect on oil prices and inflation expectations, influenced the long-term anchor for global asset pricing—the U.S. 10-year Treasury yield.
Since the second quarter, the persistence of this geopolitical issue, coupled with stronger-than-expected U.S. employment data, has pushed Treasury yields higher, leading to notable volatility in global equity markets. This initially saw traditional sectors lose ground to the AI thematic rally, which has since experienced its own rotation and adjustment.
Recent news of a U.S.-Iran agreement, set to be signed in Switzerland on June 19th, is seen as a positive surprise. While characterized as a memorandum of understanding serving mutual interests, the key outcome is the anticipated reopening of the Strait of Hormuz.
The Haitong team argues that reopening the strait would downgrade the "summer chill" risk, weakening the upward pressure on long-term U.S. interest rates. This move would help prevent inflation from exceeding expectations and reduce the risk of further rate hikes within the year. In the near term, it is expected to bolster global risk appetite, potentially leading to a recovery and renewed strength in the primary AI investment theme.
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