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Original headline: Southbound funds viciously bought Hong Kong stock and hit a record high
□ Reporter Xu Jinzhong Wan Yu
In the eyes of many investors, Hong Kong equities have always been “value depressions”. Although the Hong Kong stock market has not been as good as the A stock market over the past two years, the focus of institutions on Hong Kong equities has increased rapidly recently. Against the backdrop of many intermediaries and public offerings to increase positions, the total amount of southbound funds for net purchases of Hong Kong shares this year is close to HK $ 600 billion, the highest in history. .
Institutional sources pointed out that compared to A shares, Hong Kong shares currently have exceptional “value for money”. The number of high-quality assets in Hong Kong stocks continues to rise, coupled with the recovery of corporate profits and continued capital inflows. The situation of long-term valuation rebates and insufficient earnings effects of Hong Kong shares is expected to change. Investment opportunities are worth expecting.
Data source: wind; where 2020 ends November 23rd
Purchase of capital to the south
As of November 24, the Shanghai Composite Index has increased by 11.56% this year, while the Shenzhen Component Index and ChiNext Index have increased by 33.28% and 48.76% this year. Compared to the A-stock market, the Hong Kong stock market underperformed and the Hang Seng Index was down 5.76% this year.
But after two years of silence, the attention of the Hong Kong stock market has increased rapidly in recent days. Wind data shows that as of November 23, total net purchases of Hong Kong shares by Southbound funds that month amounted to HK $ 55.634 billion, or around 47.608 billion yuan. Throughout 2020, the momentum of Hong Kong share south purchases has not changed. The total amount of southbound funds flowing into the Hong Kong stock market has reached its highest level in history. Since the beginning of this year, net southbound fund purchases in Hong Kong shares have reached Hong Kong dollars 597.258 billion, or about 533.489 billion yuan. yuan. Since the opening of Southbound Stock Connect, the total net purchase of Hong Kong shares by southbound funds has reached HK $ 1,655,536, or approximately 1,439.84 billion yuan.
Since the third quarter, many fund companies have been actively using Hong Kong stocks. Let’s take the E Fund for example. According to the third quarterly report, E Fund funds are showing signs of rising Hong Kong shares as a whole. As of 30 September, more than 40% of Hong Kong shares are allocated to the 10 fund products of the E Fund. Among them, the allocation ratio of Hong Kong shares managed by Zhang Kun, E Fund Asia Select, E Fund High Quality Enterprise Holdings for three years and E Fund Blue Chip Select exceeds 40%. Xingquan Heyi, managed by China Industrial Securities Global Fund Xie Zhiyu, also increased its Hong Kong stock allocation in the third quarter. In addition to Meituan Dianping and Tencent Holdings already held in the top ten stocks in the second quarter, they also bought BYD stock in the third quarter. . The proportion of Qianhai Kaiyuan Shanghai, Hong Kong and Shenzhen value selection of Hong Kong shares increased from 4.81% at the end of the second quarter to 37.06% at the end of the third quarter.
In addition, there are also a number of corporate fund layouts, which issue or will issue Shanghai-Hong Kong-Shenzhen funds. Chuangjin Hexin Fund is issuing Hong Kong shares of Chuangjin Hexin, and Debon Fund and China Southern Fund will soon issue Debon Shanghai, Hong Kong and Shenzhen, the leading and leading companies in southern Shanghai, Hong Kong and Shenzhen.
AH “scissors difference” expanded
Wind data shows that the Shanghai-Hong Kong AH Premium Index, the leading indicator of the AH stock price ratio, surpassed the 2015 high of 152.03 points in early October to hit 154.23 points. setting a new high over the past 10 years. The index is currently still fluctuating near the maximum. As of November 23, 13 listed companies have AH equity premiums above 300%. Among these, Zhejiang Shibao and Fudan Zhangjiang have the highest premiums exceeding 500%, reaching 514.48% and 506.84% respectively. There are also Guolian Securities and Xinhua The premium rates of 5 companies, including Sky Green Energy, also exceed 400%. China Merchants Fund pointed out that compared to A shares, the investment price ratio of Hong Kong shares is currently at a historically high level. From a medium to long term perspective, under the trend of “weak US dollar and stable RMB”, the profitability of Hong Kong and Chinese equities is highly certain and undervalued. The benefits are obvious.
Guo Chengdong, general manager of Debon Fund’s Overseas and Portfolio Investment department, pointed out that Hong Kong stocks have lagged behind the A-share market for more than two years and AH’s “scissors gap” has continued to expand. reflecting the different focus of the two markets on risk premiums. “Returning to the market itself, we have to see that in the past three years, the ecological changes in the Hong Kong stock market have started quietly and the market structure has undergone a major transformation. In the first half of 2018, the Hong Kong Stock Exchange revised its rules to allow unprofitable biotech companies to enter the market., Biotech stocks have become a hot spot in the market in recent years; in 2019, some companies with the same shares and different rights went public in Hong Kong, giving kicks off the wave of Chinese conceptual stocks returning to Hong Kong stocks; at the beginning of September 2020, the Hong Kong Stock Exchange first proposed Listed and same-stake companies with different rights are included in the HSI and the sector’s proportion of the “new economy” has increased significantly. “
Guo Chengdong also introduced that on November 13 the Hang Seng index announced the results of the quarterly index adjustment as usual. It can be seen from this index adjustment that the rising trend in the share of the “new economy” is becoming increasingly evident. Compared to the start of Southbound Stock Connect in 2014, the financial sector (Wind’s primary sector classification) accounted for 47%. In 2016, the weight of the financial sector still represented 46.8%. After the last adjustment, the share of the financial sector fell to 32%. Consumption and information technology together account for 46%. The proactive adjustment that took several years brought many high-quality assets to the Hong Kong stock market. Going forward, the rise of new high-quality economic targets is also expected to change the situation of long-term valuation discounts and insufficient earnings effects of Hong Kong equities.
Hong Kong’s stock valuation could rise
Institutions generally maintain a positive attitude towards investment opportunities in the Hong Kong stock market outlook. Debon Fund believes that the current attractiveness of the Hong Kong stock market for funds has begun to manifest itself. Next year, with the basic orientation and increased investment objectives in the “new economy”, there is still room for an increase in the valuation of Hong Kong shares.
Industrial Securities Zhang Yidong also said Hong Kong shares will not continue to maintain a low valuation. In terms of short and medium-term investment styles, this year’s global market growth style has outperformed its value; in addition, the national economy has entered a high-quality development stage, and the long-term development trend of advanced consumption, technology, medicine and production with growth flexibility is clear. The high growth phase of traditional industries is over. In the future, it could be restored to a reasonable valuation level. Matching the traditional industry leader in the Hong Kong stock market, it will also experience a value appreciation phase. At the same time, the compilation methods of the Hang Seng China Enterprise Index and this year’s Hang Seng Index will be adjusted and future technology will be included in greater weight. The compilation of the index keeps pace with the times and reflects new economic trends and valuations will also change.
Li Yaozhu, head of the GF Fund’s International Business Department, is relatively optimistic about investment opportunities in the Internet sector in Hong Kong stocks and said that when Chinese Internet companies are listed in Hong Kong, the quality of business growth will be improved. . Because the digital transformation on the continent will rely on these companies for structured data applications. Furthermore, the stricter regulation of the Internet industry will promote the industry to become more standardized and develop stronger momentum.
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