[Editor’s Market View]
The great power competition is intensifying, and Hong Kong stocks continued to adjust last week. The Hang Seng Index fell below the critical 20-day moving average.
The U.S. government shutdown issue remains unresolved, while on the other hand, various sanctions continue to escalate: plans to upgrade restrictions on semiconductor equipment exports to China, prohibiting the sale of lithography machines and including any company with 50% or more ownership in the entity list; imposing hefty port tariffs on ships to China, effective October 14, with tariffs increasing annually; planning to ban Chinese airlines from flying over Russian airspace, etc., ultimately creating obstacles for the APEC leaders' meeting.
This time, there was no leniency. On October 9, China issued seven announcements, implementing export controls on rare earth-related items, technologies, equipment, raw materials, and heavy rare earth items, lithium batteries, graphite, superhard materials, etc., closing loopholes overseas as well. It’s not just the U.S. military industry; chips are also directly affected, and Trump was momentarily caught off guard. On October 10, China announced special port fees for U.S. vessels and initiated an antitrust investigation against Qualcomm.
The result was a broad sell-off in the U.S. stock market last Friday, with the Nasdaq plummeting 3.56%, the S&amp;P 500 dropping 2.72%, and tech stocks collectively suffering heavy losses, while the VIX fear index surged over 31%. In the evening, Trump posted that he officially announced an additional 100% tariff on all goods originating from China, effective November 1, on top of the existing tariffs, and simultaneously implemented &#34;export controls on all critical software.&#34;
This time, our countermeasures are more proactive and stronger. We have shifted from defense to counterattack. The key is that time is on our side. Not to mention other factors, Trump has little time left; if he doesn’t achieve results soon, the midterm elections will be a disaster. Therefore, it is highly likely that he will seek compromise when faced with insurmountable challenges.
Of course, the premise is that we must be tough enough. First, the rare earths must rise, with Baotou Steel and Northern Rare Earth announcing: an increase in the related transaction price of rare earth concentrates for the fourth quarter of 2025. This news comes at a timely moment. Secondly, domestic chips must rise; from October 15 to 17, the 2025 Bay Area Semiconductor Industry Ecosystem Expo will be held at the Shenzhen Convention and Exhibition Center (Futian), and we hope for surprises from the conference. Additionally, CCTV summarized the 14th Five-Year Plan and looked forward to the 15th Five-Year Plan over the weekend. It mainly mentioned infrastructure investment, highlighting 102 major projects. Meetings have been held in Tibet, Hainan, Xinjiang, and other places to plan for the 15th Five-Year Plan. Last week, funds have already begun to position themselves, and the performance of other dividend-related and financial sectors is also quite critical.
[This Week's Golden Stock]
Datang Gold (08299)
Datang Gold (08299) announced that it has submitted an application for a transfer listing to the Stock Exchange according to Chapter 9B of the Main Board Listing Rules on October 10, 2025 (after trading hours), and the transfer listing will not involve the issuance of any new shares by the company.
Central banks around the world are resolutely abandoning U.S. Treasuries and increasing gold reserves: the proportion of gold in central bank reserves, excluding the Federal Reserve, has surpassed U.S. Treasuries for the first time since 1996, with countries including China continuously purchasing gold and selling U.S. Treasuries over the past three years, with some central banks directly requesting an increase in gold reserve ratios to 30%. This trend remains unchanged and has only just begun
Institutional allocation of gold is accelerating: SPDR holdings have surpassed 1,000 tons, up from around 920 tons in May, indicating that overseas institutional investors are entering the market at an accelerated pace. Recently, Hong Kong announced plans to promote the Hong Kong Airport Authority and financial institutions to expand gold storage in the region, aiming to exceed 2,000 tons in three years and build a regional gold reserve hub, directly adjusting the gold centers in New York and Switzerland. This all indicates an increasing importance of gold allocation for global central banks.
【Industry Observation】
On October 11, the Democratic Republic of the Congo announced cobalt export quotas, reinforcing resource sovereignty through a quota system, marking a shift in the cobalt market from a surplus cycle to a shortage cycle, with a systematic increase in price centrality becoming a trend.
From the quota data, domestic enterprise quotas are as follows: Luoyang Molybdenum is expected to have a quota of 31,200 tons in 2026, accounting for 27% of last year's production, 35.9% of the basic quota, and 32.5% of the total quota, with around 6,500 tons of export quota remaining for 2025; Huayou's Q4 export is 224 tons, accounting for 1.24%, with 1,080 tons next year; Shengton's Q4 export is 350 tons, accounting for 1.93%, with 1,680 tons next year.
For smelters without quotas: Although smelters do not have direct quotas, the government has set a 10% &#34;strategic quota,&#34; which is &#34;fully allocated&#34; by ARECOMS. This means that smelters can also obtain corresponding quotas from this platform.
Price increases have become a foregone conclusion. Research institutions indicate that while it is difficult to conclude how much, the upward trend in cobalt prices is certain, with a short-term target of 400,000 yuan/ton not being a big issue, and possibly reaching 500,000 yuan/ton by the end of this year. The basic quota is 87,000 tons, and the total quota is 96,600 tons, with the remaining 10% being adjustable strategic quotas, leading companies to seek to occupy more quotas.
Key stocks to watch in Hong Kong include Liqin Resources (02245), Luoyang Molybdenum (03993), and Jinchuan International (02362).
【Data Monitoring】
The Hong Kong Stock Exchange announced that the total number of open contracts for the Hang Seng Index futures (October) is 122,235, with a net open interest of 45,122 contracts. The settlement date for the Hang Seng Index futures is October 30, 2024.
The Hang Seng Index is at 26,290 points, with a dense area of bearish certificates deviating from the central axis above, while bullish certificates are close below, indicating a potential for short selling. This week's focus is on the Federal Reserve's FOMC September meeting minutes, which will provide insight into decision-makers' thoughts and paths regarding future interest rate cuts. The uncertainty of Sino-U.S. trade negotiations raises market concerns, leading to a bearish outlook for the Hang Seng Index this week.
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【Editor's Remarks】
With rare earths, agricultural products (promises made by Trump to farmer voters), and TikTok not yet sold, it is expected that after a period of negotiation, Trump will return to reality, and both sides may form a new trade agreement with higher bilateral tariffs. In the last trading day, capital momentum turned negative, and foreign capital activity decreased, but long-term funds are still supporting the market, which still has a safety margin
Short-term avoidance of sectors with high dependence on exports to the U.S., such as certain consumer electronics and textile manufacturing Hong Kong stocks, is necessary, as their profits may be squeezed by rising export costs. However, areas such as technology, software, and new consumption, where foreign capital is clearly returning, can continue to be a focus

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The great power competition intensifies, Hong Kong stocks continue to adjust, and the Hang Seng Index has fallen below the 20-day moving average. The United States has increased sanctions against China, including restrictions on semiconductor equipment exports and high tariffs. In response, China has implemented countermeasures, enforcing export controls, particularly in the areas of rare earths and chips. Trump announced a 100% tariff on Chinese goods starting November 1, leading to a strong market reaction and a sharp decline in U.S. stocks. In the future, China needs to strengthen its rare earth and chip industries, looking forward to positive outcomes from the upcoming semiconductor industry expo

Zhitong Decision Reference | Stronger proactive countermeasures, chips need to rise, infrastructure dividend categories have capital layout