00116 Overview

Gold Jewelry Price Surge: Gold jewelry prices from domestic brands in Mainland China have risen significantly, with most brands exceeding RMB1,300 per gram, marking a new record for single item prices.

Leading Brand Prices: CHOW TAI FOOK has set its price at RMB1,313 per gram, while Lukfook Jewelry and CHOW SANG SANG have also increased their prices to RMB1,311 and RMB1,309 per gram, respectively.

Market Reactions: The increase in gold prices comes amid concerns over excessive sector decline following the announcement of new VAT regulations on gold by the Chinese government.

Short Selling Data: As of November 12, short selling data indicates significant activity in the market, with CHOW TAI FOOK experiencing short selling of $85.02 million and a ratio of 51.611%.

Market Downtrend: The HSI fell 161 points (0.6%) to 25,997, dropping below the 26,000 mark, with significant declines in consumer and gold jewelry stocks.

Consumer Stocks Performance: POP MART and MIXUE GROUP saw notable declines, with POP MART hitting a five-month low, while short selling activity was high for both companies.

Gold Jewelry Sector Impact: The cancellation of tax incentives for gold purchases in China led to a downturn in gold jewelry stocks, with several companies, including LAOPU GOLD and CHOW TAI FOOK, experiencing significant losses.

Gold Miners Struggles: International gold prices continued to decline, negatively affecting gold mining stocks like ZIJIN MINING, which was the worst performer among blue chips, alongside other mining companies facing substantial drops.

Market Performance: The HSI rose by 1% to close at 26,158, with total market turnover reaching $228.676 billion. The HSCEI and HSTECH also saw gains of 1% and 0.2%, respectively.

Financial Sector Highlights: HSBC and HKEX experienced slight increases of 0.2% and 1.2%, while AIA surged by 6%. Major Chinese banks also reported gains between 2% and 3.1%.

Impact of Gold Tax Policies: Gold jewelry retailers faced significant declines, with losses ranging from 6.1% to 8.7% following new tax policies in mainland China, affecting companies like LAOPU GOLD and CHOW TAI FOOK.

Resource and Energy Stocks: Oil stocks CNOOC and PETROCHINA rose over 3% after OPEC+'s production decision, while coal stocks also saw increases. In contrast, resource stocks like MMG and JIANGXI COPPER experienced declines.

Trade Agreements Impact: Recent trade agreements between China and the US, including the suspension of rare earth export controls, resulted in a mixed performance of Hong Kong stocks, with the HSI closing up 0.6% at 26,057.

Chip Stocks Decline: The White House's announcement that China will end investigations into companies like NVIDIA led to declines in chip stocks, with SMIC and HUA HONG SEMI dropping over 4%.

Financial Sector Performance: Financial stocks showed varied results, with major Chinese banks gaining between 1.9% and 3.1%, while brokers experienced declines of over 2%.

Gold Jewelry Retail Stocks Drop: New gold tax policies in mainland China caused significant declines in gold jewelry retail stocks, with losses ranging from 7% to 8.4% for companies like LAOPU GOLD and CHOW TAI FOOK.

Impact of New Gold Tax Policy: A new gold tax policy in China has led to significant declines in gold jewelry stocks, with LAOPU GOLD and CHOW TAI FOOK experiencing drops of over 7% following the announcement.

Details of the Tax Policy: The policy exempts "standard gold" traded on specific exchanges from VAT for on-exchange transactions, but imposes different taxes for physical deliveries based on their intended use, effective from November 1, 2025, to December 31, 2027.

Market Reactions: Spot gold prices fell below USD 4,000 per ounce amid reduced expectations for a Federal Reserve rate cut, contributing to a lackluster performance among gold miners and related stocks.

Short Selling Trends: Several gold mining stocks, including CHINAGOLDINTL and ZIJIN MINING, saw notable short selling activity, reflecting investor skepticism about the sector's performance in light of the new tax policy.

Market Performance: The HSI fell by 0.9% to 25,781, with the HSCEI and HSTECH also declining by 0.8% and 1.4%, respectively, amid a total market turnover of $227.536 billion.

Gold Price Decline: Gold prices experienced their largest single-day drop in over a decade, impacting major mining companies like Lingbao Gold and Zijin Mining, which saw significant declines in their stock prices.

Consumer and Pharma Stocks: Consumer stock POP MART rose by 2.4% following a substantial revenue increase, while several pharmaceutical stocks showed mixed results, with some advancing and others declining after rating changes.

Economic Indicators: China's PPI and inflation rates for September showed slight improvements, with PPI at -2.3% and inflation at -0.3%, both better than previous values.