[ET Net News Agency, 15 December 2025] China's industrial output, retail sales, and
fixed asset investment data for November all missed forecasts, challenging the
government's goal of achieving 5% full-year growth. While hopes persist that Beijing will
step up easing measures to rekindle market confidence, the latest data disappointments,
coupled with an overnight drop on Wall Street, saw the Hang Seng Index open below several
key moving averages. Although A-shares stabilised mid-session and helped the HSI recover
some ground, the Hong Kong market soon resumed its decline. At midday, the HSI was down
240 points or 0.9% at 25,736, losing the 100-day (25,866), 20-day (25,802), and 10-day
(25,786) moving averages. Main board turnover surpassed HKD 108.2 billion. The Hang Seng
China Enterprises Index fell 109 points or 1.2% to 8,970, while the Hang Seng Tech Index
lost 100 points or 1.8% to 5,537.

"Wong Wai Ho: HSI likely to range between 25,100 and 26,100"

Dragged down by last Friday's Wall Street pullback, Hong Kong stocks lost multiple key
averages in early trade. Wong Wai Ho, the First Vice President of the Yan Yun Family
Office, told ET Net News Agency that the HSI has performed reasonably well this year and
that funds have little incentive for window-dressing into year-end. With most major events
for December already behind us, he expects the HSI to remain range-bound between the
50-day moving average (about 26,100) and 25,100 in the near term.
The Bank of Japan meets this week, and it is widely expected to resume its rate hike
cycle. Sources suggest BOJ Governor Kazuo Ueda's policy path could include up to four
hikes, with three potential moves after this week's anticipated adjustment. Wong believes
the market has largely priced in these developments, and expects the HSI to hold its
current trading range.
China's National Bureau of Statistics reported November retail sales at RMB 4.3898
trillion, up 1.3% year-on-year, missing expectations of 2.8% and slowing 1.6 percentage
points from October, marking the weakest pace since December 2022. Nip Chun Pong, the
Chief Strategist at Solo Securities, noted that the HSI fell less than 100 points from the
data release to the midday close, suggesting the news wasn't especially negative. He added
that last week's Central Economic Work Conference reiterated efforts to boost consumption
and finance, limiting any adverse market impact.

"US AI and debt bubble risks contained, but valuations high, not a good entry point"

Oracle recently issued large amounts of debt to fund AI infrastructure investments,
pushing its credit default swap (CDS) costs to their highest since the global financial
crisis and sparking liquidity concerns. The stock has come under pressure, with Bloomberg
reporting that the completion of certain OpenAI data centre projects, originally scheduled
for 2027, has been delayed to 2028 due to labour and material shortages.
Oracle denied the delay in an official statement, reaffirming its commitment to
contracts with OpenAI. Nevertheless, the market remains wary of the company's high capital
expenditures and leverage, with shares tumbling as much as 6% intraday last Friday, ending
down 4.5%.
Wong commented that the recent correction in Oracle and other US tech stocks is mainly
due to concerns that AI project returns may fall short of expectations, potentially
straining liquidity. He sees these worries as largely sentiment-driven; for Oracle itself,
unless it faces difficulty issuing new debt and a true funding shortfall, the risk of
default is not significant.
A "closed capital loop" has formed in the AI sector, Nvidia invests heavily in OpenAI,
OpenAI spends these funds on Oracle's cloud computing, and Oracle in turn buys chips from
Nvidia. Wong observed that while this structure carries risks, if one player faces cash
flow issues, it could affect the rest, the likelihood of a crisis is low as long as orders
continue to be fulfilled. However, he cautions that valuations for US AI-related stocks
remain elevated, and does not recommend new investment at this time for those not already
holding positions.
If Oracle were to default, it would deal a blow to overall sentiment towards US tech and
AI stocks, and would also require a reassessment of company valuations. Nvidia, as a major
chip supplier, would be affected, but Wong believes it would not bring down Nvidia given
its diversified customer base, including other enterprise clients and international
demand, which can offset potential losses.
Mainland China is also actively developing AI infrastructure, but Wong noted that
valuations there are not as stretched and debt pressures are lighter than in the US. With
policy support and a steadier growth trajectory, the risk of a high-stress scenario akin
to the US is low in China.
Among Hong Kong-listed AI stocks, Wong favours Alibaba (09988) and Baidu (09888),
recommending a staggered accumulation strategy: buy Alibaba around HKD 147 for a target of
HKD 185, and Baidu at HKD 120 or below with a target of HKD 140.