[ET Net News Agency, 04 November 2025] Yesterday the HSI ended a three-day losing
streak, rebounding by 251 points. Overnight, US tech stocks led gains, and Hong Kong tech
stocks followed higher, helping the HSI recover from an initial dip and finish the morning
at 26,209, up 51 points or 0.2 percent, with main board turnover close to HKD 12.04
billion. The Hang Seng China Enterprises Index stood at 9,277, up 19 points or 0.2
percent. The Hang Seng Tech Index was at 5,910, down 12 points or 0.2 percent.

"Kwok Ka Yiu: Strong chance of rate cut next month, but pace of easing next year more
worth watching"

Hong Kong market turnover has fallen sharply in recent days, but the HSI has continued
to consolidate around the 26,000 level, and overall activity has been subdued. Kwok Ka
Yiu, the Director of Business Development at Harbour Family Office, told ET Net News
Agency that the recent decline in the HSI has paused this week as China-US news has
stabilised, the US Federal Reserve's rate cut path has become clearer, and there is
anticipation of further monetary easing by the People's Bank of China. With major
uncertainties resolved, the market is lacking catalysts, leading to a pullback in
previously hot sectors such as tech and new consumption stocks. With the rate cut cycle
underway, funds are rotating into dividend-yielding stocks. He expects the market will see
sector rotation, with the HSI fluctuating between 25,800 and 26,500.
Earlier, the US Federal Reserve Chair signalled a more hawkish stance, slashing the
probability of a rate cut next month. However, Kwok points out that rate futures still
show a 25 basis point rate cut next month is the mainstream view, and with the Fed having
paused quantitative tightening, the signal for monetary easing is clear, making it
unlikely that there will be no cut at all. He adds that after the Fed's final meeting of
this year next month, the market will shift focus to the pace of rate cuts next year, as
US rates have moved from restrictive to neutral, and whether the pace of easing will slow
will shape market expectations going forward.

"Gaming revenue uptrend intact, recovery also benefits non-gaming income"

Recently, Macao announced October gaming revenue of MOP 24.09 billion, up 15.9 percent
year-on-year and surging 31.7 percent month-on-month, beating expectations. Meanwhile,
yesterday Sa Sa (00178) issued a positive profit alert, expecting interim profit for the
period ending September this year to rise by 50 to 56 percent to around HKD 48.5 million
to HKD 50.5 million, mainly due to sustained growth in visitor arrivals to Hong Kong and
Macao. Kwok agrees that Macao's gaming revenue is recovering well, with October data
showing a turnaround after the setback in September. He expects gaming revenue will likely
maintain its growth trend. With gaming stocks having pulled back collectively, current
prices offer an opportunity for medium-term positioning.
While rising gaming revenue does not directly reflect non-gaming business performance,
Kwok believes not all Macao visitors are gamblers. Rising gaming revenue indirectly
signals increased foot traffic, and non-gaming visitors will spend on other facilities.
This indirectly proves an increase in non-gaming revenue. Therefore, he suggests
considering gaming stocks with more non-gaming business, such as Galaxy Entertainment
(00027), whose current valuation is more attractive than earlier. Entry near HKD 38 is
worth considering.

"Changing consumer habits limit Sa Sa's profit upside"

As for Sa Sa, Kwok notes that even after the positive profit alert, trading volume today
remained subdued, showing the market remains cautious about its outlook. He says Sa Sa's
interim growth is mainly due to a low base and the benefit from increased Hong Kong and
Macao footfall, but it is still hard to recover previous peaks. In addition, changing
consumer habits mean tourists can easily buy imported products elsewhere and do not need
to rely on physical retailers such as Sa Sa, so future growth is likely to be limited.