01113 Overview

Market Performance: The Hang Seng Index (HSI) fell by 318 points (1.2%) to 25,579, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines.

Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.3% and Tencent down 1.1%, amidst high short selling activity.

Notable Movers: CMOC and Nongfu Spring were among the biggest losers, dropping over 5%, while China Risun GP and Qingsong Health achieved notable gains, with China Risun GP up 18.3%.

Short Selling Trends: The report highlighted substantial short selling across various stocks, indicating bearish sentiment in the market, particularly for companies like Meituan and Techtronic Industries.

Mainland China Property Purchases: Mainland China buyers acquired 2,600 units in Hong Kong in 2M26, marking a 91% year-over-year increase, with total transactions reaching HKD28.2 billion, up 136% YoY.

Factors Driving Growth: The surge in purchases is attributed to a stronger RMB exchange rate, attractive rental yields, positive gross carry, and a recovery in property prices.

Morgan Stanley's Market Outlook: Morgan Stanley is optimistic about Hong Kong's residential market, selecting CK ASSET as its top pick with an Overweight rating, and favoring SHK PPT over HENDERSON LAND.

Short Selling Data: As of March 11, 2026, short selling data indicates significant activity in HK developers, with SHK PPT and HENDERSON LAND showing notable short selling ratios.

Stock Performance Overview: Various Hong Kong stocks showed mixed performance, with WHARF HOLDINGS declining by 1.505% while HENDERSON LAND and SHK PPT saw slight increases of 0.564% and 1.461%, respectively.

Short Selling Activity: Significant short selling was noted across several stocks, with SHK PPT having the highest ratio at 34.944%, indicating investor skepticism about its future performance.

Analyst Recommendations: Citi has identified SHK PPT, CK ASSET, and SWIREPROPERTIES as top picks, suggesting potential growth driven by increased demand for residential and office properties due to geopolitical factors.

Market Sentiment: HSBC Research has maintained a "Reduce" rating on NEW WORLD DEV, indicating a cautious outlook on its financial recovery amidst ongoing market challenges.

Geopolitical Impact on Investment: Geopolitical instability in the Middle East may lead investors to reconsider their asset allocations, favoring "neutral" Asian financial centers like Singapore and Hong Kong.

Hong Kong's Favorable Position: With Singapore's new anti-money laundering measures and China's cautious approach to the conflict, Hong Kong is positioned to attract capital inflows, potentially increasing demand for residential and office properties.

Citi's Property Developer Picks: Citi has identified SHK PPT, CK ASSET, SWIREPROPERTIES, and Hongkong Land as top property developer picks, indicating a positive outlook for these companies.

Market Activity: The report notes significant short selling activity in Hong Kong stocks, with specific ratios provided for the mentioned property developers.

CK ASSET Share Price Forecast: Morgan Stanley predicts that CK ASSET's share price will rise in the next 60 days following the company's announcement of selling its UK Power Networks assets for GBP10.5 billion, which is above the RAV.

Financial Gains from Sale: If the sale is completed, CK ASSET is expected to gain HKD8.4 billion, with net proceeds of HKD22.2 billion, potentially leading to a net cash position by year-end and possible share buybacks.

Citi Upgrade: Citi has upgraded CK ASSET to a Buy rating and raised the target price to $54.55, indicating positive market sentiment.

Project Developments: The successful launch of the Kai Tak project Victoria Blosson and improved leasing at Cheung Kong Center II may further boost CK ASSET's share price, with Morgan Stanley identifying it as a top pick in the Hong Kong property sector.

Market Performance: The Hang Seng Index (HSI) rose by 249 points (0.9%) to close at 26,630, with a total market turnover of HKD288.42 billion. The HSCEI and HSTECH also saw gains, closing at 8,859 and 5,137 respectively.

Property Sector Highlights: SHK PPT reported a nearly 17% increase in interim underlying profit, leading to a 7.1% rise in its stock price. Other property developers like New World Dev and CK Asset also experienced stock price increases.

MSCI Index Changes: Changes to the MSCI China Index constituents were noted, with stocks like HESAI-W and SENSETIME-W seeing significant gains of 4.4% and 4.9%, while PONY-W and YOFC surged over 10%.

Tech Sector Updates: In the tech sector, BIDU-SW reported a 42% YoY decline in non-GAAP net profit but slightly exceeded market expectations, leading to a minor stock rebound. Other tech stocks like Tencent and Netease also saw modest increases, while Alibaba and Kuaishou experienced slight declines.