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Source: brokerage China
Southbound funds bought more than 210 billion yuan of Hong Kong stocks during the year.
Recently, Hong Kong stocks continued to strengthen, and after a short period of consolidation, they rose for three consecutive days. As of May 13, the Hang Seng Index stood steady at 19000 points, with a cumulative increase of more than 12% for the year, a nine-month high.
Hong Kong stocks continued to rebound, southbound funds did not slow the pace of net buying, and net purchases of Hong Kong stocks on May 13Fireblazebluewizardmegaways. 700 million Hong Kong dollars, the cumulative net purchase of Hong Kong stocks reached 233.662 billion Hong Kong dollars (equivalent to more than 210 billion yuan) during the year, accounting for 70% of the cumulative net purchases last year, with a strong desire to raise funds.
Against the backdrop of no significant improvement in fundamentals, the rebound in the Hong Kong stock market is widely believed to be driven by capital. Southward capital continued to flow into the Hong Kong stock market, which played a positive role in building a bottom for Hong Kong stocks. After April 11, there was a substantial inflow of foreign capital into Hong Kong stocks, which together contributed to a strong rise in Hong Kong stocks.
Looking ahead, some institutions said that the current rally in Hong Kong stocks is expected to continue and will gradually switch from the Hang Seng Technology Index to a high dividend sector. The pricing power of southbound funds is expected to be greatly enhanced in the future, replacing the style of Hong Kong stocks dominated by foreign investors.
There is a lot of money going south.
On May 13, the Hang Seng Index rose 0.8%, the closing price exceeded 19000 points, the Hang Seng Technology Index rose 1.42%, and the State-owned Enterprises Index rose 0.64%. Hong Kong stocks have continued to rise strongly recently, with a cumulative increase of more than 12% this year, a nine-month high, which has aroused widespread concern in the market.
Citic Construction Investment Securities said that the core reason for the recent strong rise in Hong Kong stocks is the improvement in the capital side. This round of rise, southbound funds play a leading role, since February continued to flow, by the dividend plate gradually spread to other plates. After April 11, there was a substantial inflow of foreign capital into Hong Kong stocks, which resonated with domestic capital to push up the current round of Hong Kong stocks.
BoCom International agrees that Hong Kong stocks have continued to rebound since April and the biggest buyers in the market are foreign investors. From the end of March to early May, there was a slight net increase in foreign capital holdings.
From the perspective of southward capital flows, the net purchase of Hong Kong stocks on May 13 was 8.807 billion Hong Kong dollars, the highest since April 17, with obvious signs of fund-raising.
For the whole year, the cumulative net purchase of Hong Kong stocks by southward funds reached 233.662 billion Hong Kong dollars, accounting for 70% of the cumulative net purchase last year, and there is a strong desire to raise funds.
Hong Kong stock market resources plate, Internet technology plate rose one after another, driving the market trading sentiment to pick up. Recently, the Hong Kong real estate sector rebounded, superimposed dividend dividend tax reduction rumors, the Hong Kong stock market ushered in the second wave of rebound.
Judging from the performance of the plate, the information, financial and real estate sectors led the rise in the past 20 days. The raw materials, energy and information sectors have led the gains so far this year, while health care remains the worst performer, falling more than 16 per cent during the year.
The underlying funds of Hong Kong stocks are elated.
The Hong Kong stock market continued to rebound, and the ETF, the subject of Hong Kong stocks, which had lost money for many years, finally ushered in a strong rebound.
In the past 60 days, Hong Kong Stock Exchange Internet ETF, Hong Kong Stock Connect Technology 30ETF, Hong Kong Stock Internet ETF and Hong Kong Stock Connect Internet ETF have all risen by more than 40%, which is enough to show the recent rebound of Hong Kong stocks.
Judging from the full-year performance of cross-border ETF, the ETF of Hong Kong stocks led the growth, with Hong Kong stock dividend ETF, Hong Kong state-owned enterprise ETF, Hong Kong stock dividend ETF, Hong Kong stock state-owned enterprise ETF and H-share ETF all up more than 20% during the year.
The ETF performance of Hong Kong stocks outperformed ETF in Europe and the United States, becoming the prettiest performer in the QDII market this year.
The trading volume of Hong Kong stocks' underlying ETF continued to increase. For example, on May 13, the daily turnover of Hang Seng Internet ETF was close to 4 billion yuan, and the Hang Seng Technology Index ETF and Hang Seng Technology ETF reached 2.981 billion yuan and 2.614 billion yuan respectively.
Some Hong Kong equity-themed active equity funds have also performed well. Such as Qianhai open source Shanghai, Hong Kong and Shenzhen Huixin, Castrol Shanghai, Hong Kong and Shenzhen returns, Huatai Berry Hong Kong shares through quantification, rich countries, Shanghai, Hong Kong and Shenzhen high-quality assets and other funds that contain Hong Kong volume have all increased by more than 20% this year.
In fact, the Hong Kong stock market has performed poorly in recent years, and most investors have invested in Hong Kong stocks through fixed investment in ETF. With the recent rebound in the Hong Kong stock market, the overall losses of investors holding Hong Kong stock ETF have gradually narrowed. And active equity fund managers are actively embracing Hong Kong stocks, constantly increasing positions in Hong Kong stocks at the bottom.
For example, according to the first quarterly report disclosed by the Yi Fangda Blue Chip Select Fund, Zhang Kun continued to increase his position in the Hong Kong stock market, with a stock position of about 43.99%. According to the quarterly report of the Ruiyuan growth value Fund jointly managed by Fu Pengbo and Zhu Jie, the fair value of Hong Kong stocks invested by the fund through the Hong Kong Stock Connect trading mechanism is 3.783 billion yuan, accounting for 20.11% of the net asset value of the fund at the end of the period.
In response to the rebound in the Hong Kong stock market in the first quarter, the manager of Qianhai Open Source Shanghai, Hong Kong and Shenzhen Huixin Fund said that since the Fed's position changed in November 2023, major markets around the world have performed relatively well, especially emerging markets in the Asia-Pacific region, such as South Korea, Japan and India. The Chinese market has not been boosted. The very cheap valuation of the stack market and the more fully reflected in the price of pessimistic assumptions have enabled the Hong Kong market to perform more soundly than A shares without financial support at the national level.
Talking about the logic of the rebound in Hong Kong stocks, Zhao Xiancheng, fund manager of the overseas Investment Department of Boshi Fund, believes that this rebound can take April 16 (China GDP Disclosure Day in the first quarter) as a watershed. From mid-January to April 16, the market is worried about the downward pressure on China's economy, but after the market panic fell, conservative incremental funds from insurance and bank financial management pursued low volatility and cash returns. Therefore, the allocation of low valuation, high dividend, the relative performance of red chips at this stage is better than the new economy of Hong Kong stocks.
The rise of Hong Kong stocks is expected to continue this round.
After a continuous rebound, how will the future performance of the Hong Kong stock market be interpreted?
Today, Hong Kong is in a period of transition and transition. Wang Xinchen, a Castrol fund manager, believes that the current general low valuations and low liquidity will be eliminated as this round of macro fundamentals are expected to reverse. The Internet and other Hong Kong stock technology industries have been revised down to the bottom of history after a higher-than-expected valuation in 2023, which is expected to usher in greater valuation flexibility under the reversal of macro expectations. At present, Hong Kong stock valuations are still historically low. As of the end of April, the price-to-earnings ratio of the Hang Seng index was 9.14, which was 16.61% in the last 10 years. Looking at the world, Chinese assets are extremely undervalued and the investment potential is even greater.
Boshi Fund said that in terms of Hong Kong stocks, the recent US dollar suppression on Hong Kong stocks has eased, Hong Kong stocks' risk appetite has improved, trading sentiment has risen sharply, southward inflows have improved, and the follow-up overall trend will depend on the stabilization of the domestic economy.
Looking forward to the future, CITIC Construction Investment Securities believes that the current rally in Hong Kong stocks is expected to continue, gradually switching from the Hang Seng Technology Index to a high dividend sector. The pricing power of southbound funds is expected to be greatly enhanced in the future, replacing the style of Hong Kong stocks dominated by foreign investors. The allocation of Hong Kong stocks this year is still the main line of dividend plate, science and technology plate can pay attention to the improvement of the leading stocks.
Specifically, Wang Xinchen is optimistic about the return of the value of Chinese assets listed overseas, preferring high-quality varieties with a better profit model, excellent management, long-term space and competitive advantage, and reasonable valuations and expectations. Focus on the allocation of technology growth assets, mainly focused on the Internet, software and other key science and technology targets in Hang Seng Technology. Most companies are expected to continue to recover in 2024, superimposing a small portion of the gains brought about by AI, and expected valuations are expected to be further digested.
Xing Cheng, manager of Hang Seng Qianhai Fund, is optimistic about investment opportunities in three main lines: first, high dividend assets with deterministic shareholder returns, including telecommunications, energy, utilities and financial industries. The second is structural industrial opportunities that benefit from offshore logic, including manufacturing and branding in industry, new energy vehicles and consumer industries. The third is the opportunity of industrial upgrading under the trend of scientific and technological innovation, including TMT and biomedical sectors.