[ET Net News Agency, 27 April 2026] The second round of negotiations between the US and Iran has been temporarily suspended, and the market continues to observe the development of the situation in the Middle East. However, the strength of chip stocks pushed the Korea stock markets to record highs, and the Japan stock market also performed well. The HSI fluctuated this morning, continuing to move up and down around the 26,000 point level, falling by more than 100 points at most during the early session. However, as major Asia Pacific stock markets performed well and Hong Kong technology stocks strengthened, the HSI turned upwards, closing the half day at 26,016, up 38 points or 0.1%, with main board turnover exceeding HKD 134.6 billion. The Hang Seng China Enterprises Index stood at 8,794, up 18 points or 0.2%. The Hang Seng Tech Index stood at 4,966, up 64 points or 1.3%.
"Nip Chun Pong: HSI expected to fluctuate between 25,500 and 26,500 points this month"
Global market focuses are numerous this week. In addition to the ongoing deadlock in US Iran negotiations, a new round of the "Super Central Bank Week" will commence this week, involving major global central banks such as the Federal Reserve, the European Central Bank, and the Bank of England. On the other hand, the Hong Kong and US stock markets will also enter earnings season. US giants Apple, Microsoft, Alphabet, Amazon, and Meta will announce results this week. In terms of Hong Kong stocks, there are CNOOC (00883), BYD (01211), Geely Automobile (00175), and HKEX (00388). Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that since the results of heavy-weight Hong Kong technology stocks are mostly concentrated in mid to late May, the stocks reporting this week have smaller weightings, and the impact on the overall market is expected to be limited. The HSI is estimated to fluctuate within the 25,500 to 26,500 point range for the remainder of the month. Regarding the Federal Reserve's interest rate decision, interest rate futures indicate a more than 90% probability of keeping rates unchanged. The market has already reflected this expectation in advance, so the impact on Hong Kong stocks will not be significant. He believes that the change in the Federal Reserve's interest rate path may only become clear after the new Chairman takes office in June.
Nip Chun Pong emphasised that the situation in the Middle East remains the focus of the global market, affecting stock markets through oil prices and US dollar safe haven sentiment. However, since the heavy-weight stocks of the HSI are less concentrated in sensitive industries such as AI or chips, and even large technology stocks like Tencent (00700) and Alibaba (09988) have diversified businesses, the direct impact of geopolitical fluctuations is relatively small. He believes that if tensions in the Middle East suddenly escalate, the volatility of stock markets in Japan and Korea may be more obvious than that of Hong Kong stocks. But also because the component stock structure lacks these types of high growth industries, even if global stock markets strengthen, the upward momentum of Hong Kong stocks often tends to be relatively slow.
"Coal price outlook offsets impact of Shenhua's earnings decline"
China Shenhua (01088) (Shanghai: 601088) announced that for the first quarter ended 31 Mar, profit was approximately RMB 11.88 billion, a decrease of 11%, with earnings per share of RMB 0.591. The group stated that operating income was RMB 70.4 billion, up 1.2%, due to an increase in power sales revenue resulting from growth in electricity sales. Operating costs fell by 3%, as sales volume and sales costs of outsourced coal grew. General and administrative expenses fell by 10.6% due to reduced labour costs, but R&D expenses rose by 38%, and interest income fell by 27%. Net cash inflow from operating activities was RMB 17.4 billion, down 15.5%. The group stated that in the first quarter, the prices of self-produced coal and outsourced coal fell by 3.3% and 7.7% respectively, while sales volumes fell by 0.6% and rose by 21.2% respectively.
After the announcement of the results, Shenhua's share price performance remained firm. Nip Chun Pong pointed out that the market focus has shifted from past performance to future expectations. The results reflect the performance as of the end of March, whereas since March, tensions in the Middle East have driven international oil prices steadily upwards, and the market expects the high oil price environment to continue in the second quarter. As coal is a substitute for oil, its price outlook is therefore favoured. Thus, investors hope that Shenhua's second quarter or interim results may strengthen, and this expectation has offset the negative impact of the first quarter profit decline on the share price. He further pointed out that Shenhua's performance has shown gradual improvement since 2024, and he believes the profit decline in the second quarter will narrow to single digits.
Regarding the trend of Shenhua's share price, Nip Chun Pong stated that although its share price has performed firmly, it will face significant resistance near HKD 50 in the short term. The current share price is around HKD 47. Considering that the upside potential is relatively limited, he suggests waiting for a pullback to the HKD 43 to HKD 45 range before making arrangements. He added that if considered from a dividend yield perspective, Shenhua's dividend of over 6% is indeed attractive. However, if more emphasis is placed on the upward potential of the share price, China Coal (01898) may provide a better potential return. The stock reached a high of HKD 15.3 in mid-March, and the current share price has not yet broken through HKD 14. Calculated from the current price of approximately HKD 13.9, there is still some upward room from the previous high. The analysis suggests waiting for China Coal to pull back to a level of approximately HKD 13.5 before considering an acquisition, using the previous high as the initial target price.
"Nip Chun Pong: HSI expected to fluctuate between 25,500 and 26,500 points this month"
Global market focuses are numerous this week. In addition to the ongoing deadlock in US Iran negotiations, a new round of the "Super Central Bank Week" will commence this week, involving major global central banks such as the Federal Reserve, the European Central Bank, and the Bank of England. On the other hand, the Hong Kong and US stock markets will also enter earnings season. US giants Apple, Microsoft, Alphabet, Amazon, and Meta will announce results this week. In terms of Hong Kong stocks, there are CNOOC (00883), BYD (01211), Geely Automobile (00175), and HKEX (00388). Nip Chun Pong, the Chief Strategist at Solo Securities, told ET Net News Agency that since the results of heavy-weight Hong Kong technology stocks are mostly concentrated in mid to late May, the stocks reporting this week have smaller weightings, and the impact on the overall market is expected to be limited. The HSI is estimated to fluctuate within the 25,500 to 26,500 point range for the remainder of the month. Regarding the Federal Reserve's interest rate decision, interest rate futures indicate a more than 90% probability of keeping rates unchanged. The market has already reflected this expectation in advance, so the impact on Hong Kong stocks will not be significant. He believes that the change in the Federal Reserve's interest rate path may only become clear after the new Chairman takes office in June.
Nip Chun Pong emphasised that the situation in the Middle East remains the focus of the global market, affecting stock markets through oil prices and US dollar safe haven sentiment. However, since the heavy-weight stocks of the HSI are less concentrated in sensitive industries such as AI or chips, and even large technology stocks like Tencent (00700) and Alibaba (09988) have diversified businesses, the direct impact of geopolitical fluctuations is relatively small. He believes that if tensions in the Middle East suddenly escalate, the volatility of stock markets in Japan and Korea may be more obvious than that of Hong Kong stocks. But also because the component stock structure lacks these types of high growth industries, even if global stock markets strengthen, the upward momentum of Hong Kong stocks often tends to be relatively slow.
"Coal price outlook offsets impact of Shenhua's earnings decline"
China Shenhua (01088) (Shanghai: 601088) announced that for the first quarter ended 31 Mar, profit was approximately RMB 11.88 billion, a decrease of 11%, with earnings per share of RMB 0.591. The group stated that operating income was RMB 70.4 billion, up 1.2%, due to an increase in power sales revenue resulting from growth in electricity sales. Operating costs fell by 3%, as sales volume and sales costs of outsourced coal grew. General and administrative expenses fell by 10.6% due to reduced labour costs, but R&D expenses rose by 38%, and interest income fell by 27%. Net cash inflow from operating activities was RMB 17.4 billion, down 15.5%. The group stated that in the first quarter, the prices of self-produced coal and outsourced coal fell by 3.3% and 7.7% respectively, while sales volumes fell by 0.6% and rose by 21.2% respectively.
After the announcement of the results, Shenhua's share price performance remained firm. Nip Chun Pong pointed out that the market focus has shifted from past performance to future expectations. The results reflect the performance as of the end of March, whereas since March, tensions in the Middle East have driven international oil prices steadily upwards, and the market expects the high oil price environment to continue in the second quarter. As coal is a substitute for oil, its price outlook is therefore favoured. Thus, investors hope that Shenhua's second quarter or interim results may strengthen, and this expectation has offset the negative impact of the first quarter profit decline on the share price. He further pointed out that Shenhua's performance has shown gradual improvement since 2024, and he believes the profit decline in the second quarter will narrow to single digits.
Regarding the trend of Shenhua's share price, Nip Chun Pong stated that although its share price has performed firmly, it will face significant resistance near HKD 50 in the short term. The current share price is around HKD 47. Considering that the upside potential is relatively limited, he suggests waiting for a pullback to the HKD 43 to HKD 45 range before making arrangements. He added that if considered from a dividend yield perspective, Shenhua's dividend of over 6% is indeed attractive. However, if more emphasis is placed on the upward potential of the share price, China Coal (01898) may provide a better potential return. The stock reached a high of HKD 15.3 in mid-March, and the current share price has not yet broken through HKD 14. Calculated from the current price of approximately HKD 13.9, there is still some upward room from the previous high. The analysis suggests waiting for China Coal to pull back to a level of approximately HKD 13.5 before considering an acquisition, using the previous high as the initial target price.
