The Hong Kong stock market underperformed in October, with the Hang Seng Index briefly rising at the start of the month before retreating to its 60-day moving average. The index fluctuated between 25,145.14 and 27,381.84 points. Market expectations were disrupted by geopolitical tensions, including U.S. tariff escalations and sanctions, which prompted China to retaliate with rare earth export controls. Despite these pressures, the market stabilized after the announcement of China's 15th Five-Year Plan, boosting investor confidence.
Key market trends in October included strong performances in IPOs, with 11 out of 12 new listings gaining on their debut. Notable gainers included Golden Leaf International Group (08549), which surged 330%, and CF Pharmtech (02652), offering a per-lot return of ~HK$12,000. AI-focused DeepExi Tech (01384) rallied nearly 5x from its IPO price. Outside IPOs, sectors like aluminum (e.g., CHALCO (02600)), shipping (COSCO SHIP ENGY (01138)), and uranium (CGN MINING (01164)) showed resilience.
Looking ahead to November, market direction hinges on U.S. policy developments, including Supreme Court hearings on tariff legality (scheduled for November 5) and potential government shutdown impacts. The Fed's December rate decision remains a wildcard, with Chair Powell signaling caution. Meanwhile, U.S.-China trade tensions eased slightly after a one-year tariff truce, supporting market sentiment.
**November Investment Strategy: Focus on Defensive Stocks** October's top 10 picks outperformed the Hang Seng Index (average gain: 6.1% vs. 2%). Top performers included MCC (01618) (+17%) and Bilibili-W (09626) (+11.4%). For November, defensive sectors like healthcare (e.g., Hansoh Pharma (03692), Pharmaron (03759)) and AI-driven PCB makers (KB Laminates (01888)) are favored. Other highlights: 1. **GCL Tech (03800)**: Benefiting from silicon price rebounds and anti-dumping policies. 2. **CSSC Shipping (03877)**: Leveraging shipping rate hikes and green fleet upgrades. 3. **Zoomlion (01157)**: Strong overseas growth (55.6% of revenue) and robotics expansion. 4. **Tiangong Int'l (00826)**: Titanium alloy demand in electronics and aerospace. 5. **Kinetic Dev (01277)**: Coal sector revival amid policy shifts.
Key risks include prolonged U.S. political gridlock and Fed policy uncertainty. The Hang Seng is expected to trade between 25,000 and 27,381 points in November, with volatility favoring selective opportunities.
**Top 10 Picks for November 2025**: 1. Hansoh Pharma (03692) – Oncology drug growth and overseas expansion. 2. Pharmaron (03759) – Lab services demand and acquisitions. 3. GCL Tech (03800) – Silicon market recovery. 4. KB Laminates (01888) – PCB material upgrades. 5. CSSC Shipping (03877) – Shipping rate tailwinds. 6. Zoomlion (01157) – Global machinery demand. 7. Tiangong Int'l (00826) – High-end materials leader. 8. Kinetic Dev (01277) – Coal sector rebound. 9. Tianqi Lithium (09696) – Lithium price recovery. 10. Shenzhou Intl (02313) – Apparel manufacturing efficiency gains.