[ET Net News Agency, 18 March 2026] US officials again reiterated that the Iran conflict
will end in the near term. Asia Pacific equities followed Wall Street higher. The HSI
opened up 54 points, but a pullback in oil names and adjustments in autos dragged the
index into the red. At midday, it closed at 25,825, down 43 points or 0.2%,
underperforming other major regional markets alongside A-shares. Main board turnover was
near HKD 109.0 billion, with southbound net outflows of about HKD 0.2 billion. The Hang
Seng China Enterprises Index was at 8,772, down 54 points or 0.6%. The Hang Seng Tech
Index was at 5,066, down 41 points or 0.8%.

"Mak Ka Ka: AI firms' bond interest costs are becoming a burden, dampening risk appetite"

After two days of rebound, Hong Kong stocks faced selling pressure. Following multiple
countries' refusal of US President Trump's joint escort request, oil rebounded, reigniting
inflation risks and immediately weakening flows. After being capped by the 100-day line
yesterday, the HSI kept giving back gains and hovered around 25,800 this morning seeking
support. Mak Ka Ka, Head of Financial Products Trading and Research Department of SinoPac
Securities (Asia), told ET Net News Agency that with war risks persisting, the market
fears that sustained high yields could trigger a credit crisis. Notably, many AI companies
issued large amounts of bonds earlier; the market is starting to assess the heavy interest
burden under high rates. Although this is only an initial expectation, caution has set in,
reducing willingness to deploy capital.
That said, Mak added that supportive Mainland China data should keep helping sentiment.
The market believes Mainland China can keep its recovery on track even amid war risk.
Initial view: support near 25,500, with resistance first at 26,200.

"Tencent Music and NetEase Music have solid results, but rising competition and no fresh
narrative cap upside"

Tencent Music (01698) reported adjusted profit up 9% year on year to RMB 2.49 billion,
with revenue up 16%. However, the firm said it will no longer disclose key operating
metrics such as monthly active users in quarterly releases. Its ADS tumbled overnight, and
the Hong Kong shares opened 15% lower and extended losses, down over 20% by midday. Mak
said the halt to disclosures heightens caution, as the market worries such a move signals
weakening performance. Fundamentally, last quarter was solid: subscription revenue is the
growth engine. While marketing spend weighs on margins, the business is still expanding,
and continued subscription growth should provide stronger earnings support. Overall
fundamentals are sound.
Competition is intensifying. ByteDance's Qishui Music has entered with high traffic,
putting the leadership of Tencent Music and peer NetEase Music (09899) under question and
sending both shares back to early last year's levels. Mak noted that although NetEase
Music's results were even better than Tencent Music's earlier, the market remains cautious
on the sector given rising competition. In a hot competitive phase, licensing costs also
face greater upside risk, which is a key overhang. So even with decent prints from both,
she stays neutral. A sustained re-rating likely requires capital to rediscover a
compelling sector narrative; until then, it is not a dip-buy.