On April 24, all major stock indexes in Hong Kong rose sharply. As of the closing, Hang Seng Index 、 Hand Seng China-affiliated Corp Index 、 Hang Seng China Enterprises Index The daily increase reached 2.21%, 2.45% and 1.77% respectively.
This is the third day in a row that the three major indexes have soared. Take the Hang Seng Index as an example. By the end of April 24 (the same below), it had risen 6.02% in the week, up nearly a thousand points, a new intraday high in nearly five months.
According to the analysis of the interviewees, Hong Kong shares rose sharply due to multiple factors: including five capital market cooperation measures issued by the CSRC on April 19, UBS upgraded China's A shares and Hong Kong shares to over allocation on April 23, and the Hong Kong Financial Bureau injected HK $500 million and HK $525 million liquidity into the Hong Kong banking system through the discount window on April 22 and 23, respectively, China's PMI and trade data are generally better than expected since the beginning of the year, driving the market's confidence in China's economy.
Among them, five capital markets have played a particularly significant role in Hong Kong cooperation measures. It is clear that the scope of qualified stock ETF products under the Shanghai Shenzhen Hong Kong Stock Connect will be relaxed, REITs will be included in the Shanghai Shenzhen Hong Kong Stock Connect, RMB stock trading counters will be supported to be included in the Hong Kong Stock Connect, mutual fund recognition arrangements will be optimized, and leading enterprises in the mainland industry will be supported to list in Hong Kong.
In the opinion of Bi Mengcui, a financial researcher on Ge Shang, these measures will not only help to strengthen the connectivity between the mainland and Hong Kong's capital markets, but also enhance Hong Kong's status as an international financial center, thus attracting more international investors, injecting strong confidence and momentum into the Hong Kong stock market and driving the market to continue to rise.
Since the CSRC issued five capital market cooperation measures with Hong Kong on April 19, Hong Kong shares have soared for several days. By the end of April 24, the Hang Seng Index, the Hang Seng China Enterprise Index and the Hang Seng Hong Kong Chinese Enterprise Index had all risen on the same day, up to 2.21%, 2.45% and 1.77% respectively, and up to 0.90%, 5.75% and 6.04% in the year.
From the increase in the year, it can be found that the growth of the index highly related to mainland enterprises is more obvious. According to the analysis of interviewees, this is closely related to the good performance of China's economy during the year and the five capital market cooperation measures with Hong Kong.
On the one hand, among the listed companies in Hong Kong, China, Chinese enterprises accounted for more than 70% of the market value and more than 80% of the trading volume. The Chinese economy has a great impact on Hong Kong shares. "Since this year, China's economy has been stable as a whole, especially since the beginning of the year, the PMI and trade data have generally been better than expected, which is conducive to stabilizing investor confidence to a certain extent." Guotai Jun'an Wrote in his research paper.
On the other hand, the five capital market cooperation measures with Hong Kong have opened up new channels for the interconnection between the mainland and Hong Kong, and injected new momentum into the rise of Hong Kong shares.
First of all, it is considered to be the greatest benefit to broaden the scope of qualified stock ETF products under the Shanghai Shenzhen Hong Kong Stock Connect.
Liu Jinjin, chief China equity strategist of Goldman Sachs, told reporters of the 21st Century Business Herald that in the past two years, the capital from the south has been net purchased by more than 40 billion dollars every year, becoming the most important source of capital inflow in the Hong Kong stock market. Relaxing the range of investable products of the Shanghai Shenzhen Hong Kong Stock Connect will help further promote cross-border asset allocation, Nanxia Capital will continue to provide financial support for the Hong Kong stock market.
Minsheng Bank Ying Xiwen, a senior researcher of the Research Institute, also believes that the relaxation of the scope of qualified products of stock ETFs under the Shanghai Shenzhen Hong Kong Stock Connect is mainly due to the substantial reduction of the threshold for ETF scale to be included in and transferred out of the interconnection mechanism, as well as the requirements for the proportion of various weights of ETF tracking indexes. As the threshold is lowered, the number of ETFs incorporated into the interconnection mechanism will increase in the future, which will help investors in the mainland and Hong Kong markets to expand the scope of configurable ETFs and enhance the attractiveness of the two markets. At the same time, some industry theme ETFs related to high-quality development will also be included, which is conducive to the capital market supporting the transformation of high-quality development related industries.
Secondly, supporting the RMB stock trading counter to be included in the Hong Kong Stock Connect is also one of the important measures in the eyes of the interviewees.
According to Ying Xiwen, at present, 24 Hong Kong listed companies have set up RMB counters, which can mainly provide offshore RMB funds with RMB denominated stock targets that can be purchased directly in the Hong Kong market. After the new policy, southbound funds can directly buy RMB denominated Hong Kong shares, and the dividends will also be in RMB, which can avoid certain exchange risks. It is more favorable for investors who prefer long-term dividends in the mainland.
In the opinion of Tian Lihui, Dean of the Financial Development Research Institute of Nankai University, supporting the inclusion of the RMB stock trading counter in the Hong Kong Stock Connect will help the internationalization of the RMB and further opening of the capital market.
Moreover, supporting leading enterprises in the mainland industry to list in Hong Kong can also boost Hong Kong shares.
With the gradual tightening of the IPO rhythm of the Shanghai and Shenzhen Stock Exchanges and the raising of the threshold for listing, more mainland enterprises will choose Hong Kong shares as their first choice for listing, and policy support will further enhance the enthusiasm of enterprises to go to Hong Kong. Ying Xiwen believes that the introduction of this measure will, on the one hand, help to activate Hong Kong's capital market and consolidate and enhance Hong Kong's status as an international financial center; On the other hand, it will also help mainland leading enterprises make full use of overseas financing channels to open up to global investors.
At the same time, the other two of the five measures - including REITs into the Shanghai Shenzhen Hong Kong Stock Connect and optimizing mutual fund recognition arrangements - also contributed to the rise of Hong Kong shares. According to the analysis of Ying Xi wen, the inclusion of REITs in the Shanghai Shenzhen Hong Kong Stock Connect has expanded the scope of investment objects of the interconnection mechanism, which is beneficial to investors in the mainland and Hong Kong who prefer stable dividend products, and will also provide incremental funds and liquidity for the two REITs markets, and promote the development of the two REITs markets; The optimization of mutual fund recognition arrangements is mainly to relax the restrictions on the proportion of mutual fund sales in the opposite market, which will help mainland and Hong Kong investors to increase asset allocation channels. In particular, the restrictions on mainland investors investing in overseas markets through Hong Kong mutual fund will be further reduced.
While Hong Kong stocks soared, foreign investors were also bullish on China's stock market.
On April 23, UBS upgraded China's A shares and Hong Kong shares to over allocation. It is expected that China's stock market may have high single digit upside this year.
Goldman Sachs is also bullish on China's stock market. Fu Si, an analyst of Goldman Sachs China's stock strategy, told reporters that at present, the allocation of Chinese stocks by overseas active investors has shown a trend of recovery, but the allocation is still at a historical low. Goldman Sachs believes that it will continue to rise in the future. Recently, the attention and risk appetite of international investors to Hong Kong stocks have generally improved, especially the capital of the Middle East and ASEAN, which shows that the efforts of regulatory policies to promote a more diversified Hong Kong market have begun to achieve results.
In Tian Lihui's view, foreign capital raised the rating of Chinese stocks, indicating that foreign institutions are optimistic about the prospects of the Chinese market, thus promoting the gradual flow of foreign capital into A shares and Hong Kong shares. Foreign capital over allocation of Chinese stocks is based on a positive assessment of China's economic growth, market reform, policy support and other factors.
From the perspective of investment, what are the current allocation opportunities of Hong Kong shares?
"In the next three months, Hong Kong shares have the opportunity to outperform A-shares. The risk of downward revision of Hong Kong shares' earnings is small, and the valuation is cheap. In the next 12 months, the target point of MSCI China Index is expected to be 60, implying about 10% of the upside space." Fu Si is optimistic about the trend of Hong Kong shares.
Bi Mengcui also remained optimistic about the trend of Hong Kong stocks. He mentioned that from the current market reaction and fundamentals, the Hong Kong stock market is expected to continue to rise. From the perspective of funds, as the Hong Kong stock market is dominated by foreign investors, from the signal released, whether in June or September, the Federal Reserve will probably cut interest rates this year, and liquidity is expected to be more relaxed. In terms of fundamentals, the continuous improvement of economic fundamentals in mainland China continued to underpin the Hong Kong stock market. In the long run, driven by the improvement of the internal and external environment and the superposition of undervalued values, the Hong Kong stock market will continue to bounce back.
Hong Kong shares have room to rise. Where should we start in terms of investment?
According to the analysis of the interviewees, the high dividend related areas that pay more attention to dividend distribution and repurchase are the most noteworthy. For example, Fu Si mentioned that individual stocks with high shareholder returns, namely high dividends and stocks with repurchase plans, will continue to be favored by investors.
The Office of the Chief Investment Officer of UBS Wealth Management is optimistic about industries with resilience and good revenue, as well as companies that can still bring investors high dividend yields when the market further fluctuates; At the same time, we are optimistic about finance, public utilities, energy, telecommunications and other sectors, especially large state-owned enterprises in these fields.
Goldman Sachs is optimistic about the Internet sector. Fu Si believes that in the current macro environment, non tradable goods (i.e. services) may outperform tradable goods. The former has a more favorable income growth environment and better capital expenditure and cost management.
Tian Lihui also believes that the Internet sector has a relatively high allocation value. He also reminded that the allocation of Hong Kong shares needs to consider overseas risks, international capital flows, and more importantly, the fundamentals of individual shares, industry prospects, policy environment, macroeconomic conditions and other factors.
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