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the original article was published in the ta kung pao on september 23, 2024

last week, midea group completed its listing on the hong kong stock exchange, becoming the largest ipo on the hong kong stock exchange in the past three years.

last week, due to the mid-autumn festival, there were only four trading days. the three major indexes rose. the hang seng index rose 5%; the hang seng technology index rose 6.4%; and the state-owned enterprise index rose 5%. last week, the federal reserve started to cut interest rates as expected. hong kong stocks are sensitive to external liquidity, and the linked exchange rate system pegged to the us dollar also followed the interest rate cut. the hong kong monetary authority also followed suit and announced that the base interest rate was set at 5.35% according to a preset formula, effective immediately. interest rate cuts usually reduce borrowing costs, stimulate consumption and investment, and have a positive impact on the stock market. the hong kong stock market has responded positively. hong kong stocks are more flexible than a-shares. therefore, at the industry level, growth stocks that are more sensitive to interest rate changes, such as biotechnology, technology hardware, and sectors that rely on overseas us dollar financing, and even the real estate industry, are expected to benefit from the us interest rate cut. the interest rate cut may stimulate real estate demand, thereby bringing positive effects on the export chain.

specifically, the interest rate cut cycle is expected to improve the financing environment for pharmaceutical stocks. in recent years, data from the "2023 china biopharmaceutical investment and financing blue book" shows that there were 376 financing activities in the primary market of biopharmaceutical companies throughout the year, and the financing amount dropped significantly compared with 2022, indicating that the enthusiasm for investment and financing has cooled again. public data shows that in the first half of this year, there were 121 investment and financing activities in the new drug field in the mainland, with a cumulative financing amount of 18.073 billion yuan. the "capital winter" is still continuing. the good news is that the sub-sectors such as nucleic acid drugs, gene therapy, coupled therapy and peptides are very popular.