Hong Kong's three major stock indices closed mixed, with the technology sector showing relative strength. Semiconductor ETFs saw broad gains, while gold ETFs declined. At the close, the Hang Seng Index fell by 0.57% to 25,651.12 points, with a full-day turnover of HKD 262.098 billion. The Hang Seng Tech Index rose by 0.34% to 4,873.82 points. Among major Hong Kong ETFs by size: Tracker Fund (02800) closed down 0.46% at HKD 25.86; CSOP Hang Seng Tech Index ETF (03033) closed up 0.21% at HKD 4.77; CSOP 2x Leveraged SK Hynix ETF (07709) closed up 0.84% at HKD 81.82.
Sector Performance: 1. The semiconductor industry chain experienced a full surge, with the Sci-Tech Innovation 50 Index soaring 3.2% to set another historical high. Driven by the dual catalysts of domestic memory chip leaders accelerating capital market activities and robust AI demand, related ETFs posted significant gains. At the close: CSOP CSI STAR 50 Index ETF (03151) rose 3.55% to HKD 12.82; ChinaAMC CSI STAR 50 Index ETF (03109) gained 3.52% to HKD 17.66; Bosera CSI STAR 50 Index ETF (02832) increased 2.48% to HKD 13.21. In the mainland ETF market: ChinaAMC STAR Semiconductor ETF (588170) surged 6.67% to CNY 2.719; Huatai-PineBridge STAR Semiconductor Equipment ETF (588710) rose 6.67% to CNY 2.814; ChinaAMC Semiconductor Equipment ETF (562590) climbed 5.72% to CNY 2.826. ICBC Credit Suisse Fund noted that with the substantial growth in AI computing power demand, semiconductor equipment, the "mother machine" of chip manufacturing, is entering a high-growth cycle. The strong first-quarter performance of several companies reflects robust downstream demand, particularly the explosion in demand for AI servers and high-performance computing chips, driving an expansion wave in advanced chip production. First-quarter reports indicate an overall improvement in the profitability of the semiconductor equipment sector. Driven by multiple positive factors, including high growth in AI computing power demand, progress in China's semiconductor industry has exceeded market expectations. The outlook is positive for sectors related to semiconductor equipment, materials, and wafer manufacturing.
2. South Korea market ETFs experienced significant intraday volatility, drawing attention following the breakdown of Samsung union negotiations. Related South Korea ETFs plunged during the session, with losses narrowing by the close: CSOP 2x Leveraged Samsung Electronics ETF (07747) rose 0.36% to HKD 138.85; CSOP 2x Leveraged SK Hynix ETF (07709) gained 0.84% to HKD 81.82; TR Korea ETF (02848) fell 1.61% to HKD 1,710. According to market reports, labor negotiations at Samsung Electronics in South Korea broke down again on May 20, with a large-scale strike scheduled from May 21 to June 7, marking the largest strike in the company's history. Additionally, reports indicate that South Korean President Lee Jae-myung called for setting "appropriate limits" on collective labor actions during a cabinet meeting. Although Lee did not name Samsung, his remarks came shortly after the head of Samsung's Korean union stated that a strike would proceed on Thursday following the renewed breakdown in talks. Samsung attributed the negotiation failure to the union's "excessive" demands. Furthermore, South Korea's Labor Minister will lead negotiations between Samsung and the union. Samsung and the union are scheduled to resume talks at 4 p.m. local time.
3. International gold prices faced downward pressure and retreated, leading to widespread declines in gold ETFs. At the close: CSOP 2x Leveraged Gold ETF (07299) fell 3.4% to HKD 26.1; Value Gold ETF (03081) dropped 0.84% to HKD 21.32. On May 20, gold prices continued their decline, with Shanghai gold falling 1.67% intraday to CNY 983.92 per gram. Strengthening of the US dollar and US Treasury yields, coupled with rising expectations of interest rate hikes, pressured precious metal prices. The global bond sell-off further spread, with US Treasury yields continuing to climb to historically extreme levels. Gu Fengda, Chief Analyst at Guosen Futures, analyzed that the underlying logic of this gold price correction is the systematic transmission of geopolitical conflicts through the inflation pathway to global central bank monetary policies. The systemic rise in global inflation expectations and the shift of the Federal Reserve and other major central banks to a neutral-to-hawkish policy stance suggest that the short-term pressure on precious metals may persist.
Institutional Views: Fang Yi, Chief Strategist at Guotai Junan Securities, pointed out that for the Hong Kong stock market, while it faces short-term disturbances from rising interest rates, this risk currently appears relatively controllable. The key to market performance still lies in the growth trend of the AI industry: the core driver of this global equity market rally is AI industry advancement. Although tightening marginal liquidity may disturb the market in the short term, as long as no systemic liquidity crisis occurs, the medium-term market trend will still depend on whether performance can be continuously delivered—specifically, whether the speed of upward revisions in profit expectations can outpace the speed of rising interest rates.
Wan Qingyu, Global Strategist at Industrial Securities, believes that regarding the Hang Seng Tech Index, after this round of correction, its dynamic P/E ratio is already at a relatively low level compared to most technology indices and is currently in a historical bottom range, with limited further downside potential. However, emerging from the bottom still depends on improvements in its own profitability. Four key signals are worth monitoring: first, a peak in AI traffic subsidy investments; second, positive progress in internet giants' large model development or commercialization paths; third, sustained recovery in consumption and real estate data; fourth, a resurgence in expectations for Federal Reserve monetary easing.
ETF Activity: On May 20, two funds debuted as listed ETFs: 1. HUABAO SHANGHAI SCIENCE AND TECHNOLOGY INNOVATION BOARD COMPREHENSIVE ENHANCED STRATEGY TRADING OPEN ENDED I (589280) debuted, closing up 1.85% at CNY 1.045, with a turnover of CNY 161 million. It tracks the SSE STAR Market Composite Index, covering hard technology sectors like electronics and computer science on the STAR Market. 2. Penghua CSI Science and Technology Innovation and Entrepreneurship 50 ETF (159012) debuted, closing up 1.49% at CNY 1.019, with a turnover of CNY 113 million. It tracks the CSI Science and Technology Innovation and Entrepreneurship 50 Index, covering leading stocks in emerging industries on the STAR Market and ChiNext.
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