Stock Performance: Various Hong Kong stocks showed mixed performance, with some companies like Henderson Land and Hysan Development experiencing gains, while others like Wharf REIC and Champion REIT saw declines.

Short Selling Data: Significant short selling activity was noted across multiple stocks, with SHK PPT and Wharf Holdings having the highest short selling ratios, indicating bearish sentiment among investors.

Investment Ratings: Analysts provided investment ratings, recommending buys for several stocks including Hysan Development and Sino Land, while suggesting sells for Wharf Holdings and New World Development.

Discount to NAV: Many stocks are trading at substantial discounts to their net asset values (NAV), with Kerry Properties and Hang Lung Properties showing the largest discounts at 74% and 68%, respectively.

LINK REIT Performance: LINK REIT shares fell by 0.87%, with a short selling ratio of 13.779% and a downgrade in rating from Overweight to Equalweight, with target price reduced from HK$48 to HK$37.

HANG LUNG PPT Update: HANG LUNG PPT shares increased by 2.894%, maintaining an Overweight rating with a slight target price increase from HK$10.5 to HK$10.7.

SWIRE PROPERTIES Rating Change: SWIRE PROPERTIES shares rose by 0.959%, with a rating upgrade from Equalweight to Overweight and a target price increase from HK$20 to HK$23.

WHARF REIC Decline: WHARF REIC shares decreased by 0.904%, maintaining an Underweight rating with a target price adjustment from HK$22.5 to HK$23.

Hong Kong Office Market Trends: Morgan Stanley reports a preference for office spaces over retail, with improving vacancy rates in Central District, which is expected to see a 3% rental rate increase by 2026.

Investment Recommendations: The report favors Hongkong Land and HYSAN DEV for office investments, while advising against WHARF REIC due to market share and tenant retention risks.

Retail Sector Insights: In retail, Chinese luxury brands are preferred over Hong Kong retailers, with HANG LUNG PPT being highlighted as a better investment option.

Market Activity: Notable short selling activity was observed in various stocks, with significant ratios for WHARF REIC and LINK REIT, indicating investor caution in the current market environment.

Market Performance: The Hang Seng Index (HSI) rose by 165 points (0.6%) to 25,663, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw gains of 61 points (1.1%) and 44 points (0.5%) respectively.

Active Heavyweights: Notable stocks included Meituan (+2.3%), Tencent (+1.2%), Alibaba (+0.8%), and Ping An (+0.2%), with significant short selling activity reported across these companies.

Top Gainers and Losers: Wuxi Bio and XPeng were among the top gainers, rising 6.5% and 5.7% respectively, while Shenzhou International saw a decline of 3.9%.

New Highs: Several stocks, including HSBC Holdings and Tanwan, reached new highs, indicating positive market sentiment and investor interest in these companies.

Leasing Environment Outlook: Fitch Ratings predicts that the leasing environment for commercial real estate in Mainland China and Hong Kong will face challenges in 2026, with high office vacancy rates and low net absorption impacting Grade A office rents.

Stability of Investment-Grade Landlords: Despite market difficulties, investment-grade landlords in Hong Kong are expected to maintain stable operational and financial indicators, supported by their quality assets.

Projected Rental Income Growth: Companies like HYSAN DEV and SHK PPT are anticipated to see an increase in office rental income as their new projects become operational in 2026.

Challenges for Other Firms: WHARF HOLDINGS and YUEXIU REIT may struggle with rental pressures due to new supply and lack of new projects, although their strong financial positions and asset quality help sustain their ratings.