weekly
Author: Chen Fang
2021-02-22 17:53
The last update date: 2021-02-22 17:53
The recent "northern water going south" has detonated a bull market in Hong Kong stocks.
Since the beginning of this year, as of the eve of the Lunar New Year, the net inflow of "North Water" (mainland funds) into the Hong Kong stock market through Southbound Trading has exceeded 380 billion Hong Kong dollars, which is equivalent to more than half of last year's annual scale.
Driven by funds from the south, the Hang Seng Index has risen by more than 10% this year, successfully breaking the 30,000-point mark.
Why does the market love Hong Kong stocks?
How long can this round of rising prices last?
With the daily net inflow of more than 10 billion Hong Kong dollars from the north, the activity of southward funds has continued to increase, which has become a key factor in the fluctuation of the Hang Seng Index.
Research by Guotai Junan Securities shows that since late December 2020, Beishui’s single-day turnover on the Hong Kong Stock Exchange has reached more than 80 billion Hong Kong dollars, and its share in the total turnover of the Hong Kong Stock Exchange has also risen from less than 20%. Around 30%.
The Hang Seng Index, which has stabilized at 30,000 points, has sufficient potential to continue its upside.
(Visual China)
For many years, "low valuation" has always been a label in the Hong Kong stock market.
This is mainly because Hong Kong stocks are flooded with international and local precipitation funds, and the market is not active.
For a long time, the "low valuation" of the Hong Kong stock market has failed to attract more capital inflows. The stock price that has not risen for a long time has actually made capital daunting.
Discover the value depressions from the north to the south
However, since the launch of Southbound Stock Connect in 2014, more and more mainland funds have begun to focus on the Hong Kong stock market.
Especially in 2020 when the global monetary policy tends to be loose, the risk appetite of mainland funds continues to rise, and Beishui has accelerated its deployment in Hong Kong stocks.
In 2020, the net inflow of Beishui into the Hong Kong stock market through Southbound Stock Connect channels will reach 672.1 billion Hong Kong dollars, which is more than the sum of the three years from 2017 to 2019.
Mutual fund placement in Hong Kong stocks
In the process of going from the north to the south, the role of public funds in the Mainland has become more and more important.
According to statistics from Yuekai Securities, there are currently 1,693 funds in the market that can invest in Hong Kong stocks through the Shanghai-Shenzhen-Hong Kong Stock Connect, of which 307 are equity funds and 1,289 are hybrid funds, with an overall scale of RMB 2.5857 billion.
The effectiveness of Southbound Stock Connect has become more obvious. There are currently thousands of funds that can invest in Hong Kong stocks through the Shanghai-Shenzhen-Hong Kong Stock Connect.
(Photo by Jiang Zhiqian)
The reason why the Hong Kong stock market is becoming more and more attractive to mainland institutional investors is that the new economy stocks representing the future account for an increasing proportion of the total market value of Hong Kong stocks.
According to data from Wind, a service provider of financial data and analysis tools, in 2020, the amount of funds raised by new economy companies has accounted for more than 60% of the total fundraising scale of the Hong Kong Stock Exchange that year. As of December 2020, the new economy companies accounted for the Hong Kong Stock Exchange. The total market value of listed companies has reached 29%.
Hong Kong stocks are becoming increasingly new economic
The reason why the Hong Kong stock market is becoming more and more attractive to mainland institutional investors is that the new economy stocks representing the future account for an increasing proportion of the total market value of Hong Kong stocks.
According to data from Wind, a service provider of financial data and analysis tools, in 2020, the amount of funds raised by new economy companies has accounted for more than 60% of the total fundraising scale of the Hong Kong Stock Exchange that year. As of December 2020, the new economy companies accounted for the Hong Kong Stock Exchange. The total market value of listed companies has reached 29%.
Kuaishou is officially listed on the Hong Kong Stock Exchange and is expected to be included in the Hang Seng Index in the future.
(Netease Finance)
Scarce assets are attractive
In the adjustment process of the Hang Seng Index, the weight of new economy stocks is increasing.
At present, of the seven stocks with a weight of more than 5% in the Hang Seng Index, three of them are new economy stocks, and the proportion of new economy stocks in the Hang Seng Index has exceeded 30%.
And more stocks will have the opportunity to join the Hang Seng Index in the future, such as Internet short video company Kuaishou Technology, e-cigarette manufacturing company Small International, and emerging consumer company Bubble Mart.
The scarce resources available in Hong Kong stocks are increasing their attractiveness to mainland capital and even global capital.
Hong Kong stocks, which have been undervalued for a long time, may therefore usher in a long-lasting valuation repair market, and the Hang Seng Index, which has stabilized at 30,000 points, also has sufficient potential to continue its upside.
The above is excerpted from the 253th issue of "Hong Kong 01" Weekly Report (February 22, 2021) "Beishui Strengthens the Hong Kong Stock HSI to Stand 30,000 Points". If you want to read the full text, please
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Selected content of 253 issue of "Hong Kong 01" Weekly News:
[Cover story] What kind of financial secretary does Hong Kong need?
Luo Huining's New Year's speech "changed and unchanged" has the profound meaning, how much do Hong Kong people understand?
The Significant Significance of the Case of Li Zhiying’s Bail Rejection by the Court of Final Appeal for the Guoan Suspect
Entering a society with low "meat" expectations
A beacon of life at a loss?
Silicon Valley elites are obsessed with ancient Greek Stoic philosophy
Retired teachers carefully create a paradise for Langmao
01 Weekly report in-depth report on Hong Kong stocks
