The Hong Kong stock market shows a fluctuating improvement, with Chinese bank stocks rising, and BOC Hong Kong bouncing over 5%

Today is the first quarter's settlement day for Hong Kong stocks, and the market fluctuated positively. Iran has imposed tolls on the Strait of Hormuz and prohibited U.S. and Israeli vessels from passing through. The Dow Jones and Nasdaq in the U.S. rose 0.1% and fell 0.7%, respectively, overnight. Federal Reserve Chairman Jerome Powell indicated that economic risks suggest interest rates may need to change, and he is concerned about whether energy shocks will affect inflation expectations. At the time of writing, the yield on U.S. 2-year bonds fell to 3.818%, the yield on U.S. 10-year bonds fell to 4.321%, and the U.S. dollar index dropped to 100.46. Dow futures rose 422 points or 0.93%, Nasdaq futures rose 197 points or 0.85%, the Shanghai Composite Index fell 31 points or 0.8% to close at 3,891 points, the Shenzhen Component Index fell 1.8%, and the ChiNext Index fell 2.7%. The total trading volume of the Shanghai and Shenzhen markets was 1.99 trillion RMB.

The Hang Seng Index opened 67 points higher, initially rising 237 points to 24,988 points before retreating. In the afternoon, it fell 191 points to 24,559 points, closing up 37 points or 0.2% at 24,788 points; the Hang Seng China Enterprises Index fell 24 points or 0.3% to close at 8,374 points; the Hang Seng Tech Index fell 40 points or 0.9% to close at 4,649 points. The total trading volume for the day was 255.76 billion HKD. The total trading volume of northbound trading was 108.909 billion HKD, while southbound funds had a net inflow of 703 million HKD today (net inflow of 2.467 billion HKD on the previous trading day). CNOOC (00883.HK) fell 3.1% to close at 28 HKD, with a trading volume exceeding 6.1 billion HKD, and China Fiber Optic (06869.HK) dropped 7.1%, with a trading volume of 6 billion HKD.

In March, the Hang Seng Index fell a cumulative 1,842 points or 6.9%, the Hang Seng China Enterprises Index fell a cumulative 485 points or 5.5%, and the Hang Seng Tech Index fell a cumulative 488 points or 9.5%. Southbound funds had a net inflow of 61.402 billion HKD in March. In the first quarter, the Hang Seng Index fell a cumulative 842 points or 3.3%, the Hang Seng China Enterprises Index fell a cumulative 539 points or 6.1%, and the Hang Seng Tech Index fell a cumulative 866 points or 15.7%. Southbound funds had a net inflow of 220.947 billion HKD in the first quarter.

【CNOOC falls, BOC Hong Kong strong】

Some bank stocks performed well. Agricultural Bank of China (01288.HK) reported a 3.2% increase in net profit last year and raised its final dividend, with the stock price rising 3.1%. Bank of China (03988.HK) reported a 2.2% increase in net profit last year, and its stock price rose 1.6% for the day. BOC Hong Kong (02388.HK) earned 4.9% more last year and proposed a final dividend of 1.255 HKD per share for 2025. Including the three interim dividends, the total annual dividend per share is 2.125 HKD, an annual increase of 6.8%, with a payout ratio of 56%, up 1 percentage point, and the stock price rose 5.6% for the day.

CICC published a report stating that BOC Hong Kong announced its 2025 annual results, with revenue increasing by 8.1% year-on-year and net profit attributable to shareholders increasing by 4.9% year-on-year; revenue in the fourth quarter of last year increased by 13.8% year-on-year; pre-tax profit increased by 5% year-on-year, and the results met CICC's expectations Considering the changes in market risk appetite and profit expectations, the bank has raised the company's target price by 53% to HKD 45.1, corresponding to price-to-book ratios of 1.3 times and 1.2 times for this year and next year, respectively, maintaining an "outperform the industry" rating. The bank indicated that Bank of China has disclosed that the board has in principle approved the shareholder return framework for 2026 to 2028, which mainly includes measures to orderly increase the shareholder dividend rate, share buybacks, and special dividends within the established dividend payout range (40% to 60%) to enhance shareholder returns, aiming to implement this during the performance announcement in the first half of this year.

【1,330 stocks fell, Hansoh Pharmaceutical rebounded】

Hong Kong stocks continued to weaken today, with a rise and fall ratio of 18 to 32 for main board stocks (previous day 16 to 36), with 1,330 stocks declining (a drop of 3.1%); among the Hang Seng Index constituent stocks, 47 rose and 42 fell, with a rise and fall ratio of 52 to 47 (previous day 28 to 71); the market recorded short selling of HKD 40.504 billion today, accounting for 18.468% of the total turnover of shortable stocks of HKD 219.326 billion.

Hansoh Pharmaceutical (03692.HK) saw its stock price rebound by 7.3% to close at HKD 35.48 after announcing its results. Midea (00300.HK) reported a 14% increase in net profit last year, with its stock price rising 6.8% to close at HKD 83.8. HSBC Research published a report stating that Midea's Q4 2025 results met market expectations. Despite facing a high base in the first quarter of this year, profit growth is still expected to be positive. The company is providing strong returns to shareholders through high dividends and expanding the scale of share buybacks, deciding to raise its target price to HKD 112