Recently, the magic of Hong Kong stocks has far exceeded everyone's expectations. On March 14, Hang Seng Index It fell below 20000 points and hit a new low in recent six years, Hang Seng Technology Index Below 4000 points, hitting a new low since the index was released 。
Yesterday, a statement caused a big discussion in the industry, which said, "The sharp decline of Hong Kong shares may be caused by the recent international tensions. The international funds tracking emerging market indexes have a large liquidity gap, and the emerging market indexes have the best liquidity in Hong Kong shares and A-shares. Therefore, Foreign capital has recently smashed 80 billion Hong Kong shares and 40 billion A-shares ”。
The authenticity of this news really needs to be verified, and many fund managers also gave attribution analysis on the sharp decline of Hong Kong stocks. Behind such an unprecedented change, It is affected by a series of factors, such as epidemic impact, economic pressure, war disturbance, foreign capital sales, and accountability of China Concept Shares.
Is it suitable for Hong Kong stocks to enter at this time? It may be an opportunity for fund managers to speak frankly about the current state of the Hong Kong stock market, because its valuation is cheap enough and the implied yield is considerable. There are also public offerings reminding investors that under the influence of tighter liquidity, geopolitics and other factors, the market is expected to remain volatile, and the rotation between sectors will also continue.
Behind phenomenal risk
Influenced by the sudden tension of the domestic epidemic situation and the continuous emergence of uncertainties in the overseas environment, Hong Kong shares fell seriously. By the end of March 14, the Hang Seng Index had fallen 4.97%, down more than 1000 points all over the world, the Hang Seng Technology Index had fallen more than 10%, and the technology network, real estate, medicine and automobile stocks had the largest decline.
From the current situation, the Hong Kong stock market has seen a significant correction, which has broken through the low point at the beginning of 2020 when the epidemic just broke out and is approaching the low point at the beginning of 2016. This is also the first time in 30 years that Hong Kong stocks hit the long-term support level of the 250 month moving average.
In 2021, the Hong Kong stock market pattern will be dominated by shock adjustment, and many institutions are full of expectations for the Hong Kong stock market in 2022 at the end of the year. However, since the beginning of the year, the Hong Kong stock market, especially technology stocks, is still in the process of correction. What happened to Hong Kong stocks?
"I'm not surprised that Hong Kong shares fell, but the extent of the fall was unexpected," said a fund manager of a large public offering institution in South China.
In addition to the unpredictability of the war, possible sanctions against China, the vulnerability of the offshore market, global stagflation and other impacts on Hong Kong stocks, he was more surprised by the vulnerability of investors, including foreign institutions.
“ The risks experienced by Hong Kong stocks this time are phenomenal There are strict industry supervision, epidemic impact, economic pressure, war disturbance, foreign capital sales, and accountability of Chinese stocks. " Qu Shaojie, Assistant General Manager of the International Business Department of Great Wall Fund, spoke frankly.
In Qu Shaojie's opinion, the reasons for the recent continuous adjustment of Hong Kong shares are as follows:
First, geopolitical conflicts continue to evolve. by Yesterday It has been more than two weeks since the outbreak of the Russia Ukraine conflict in Japan, which has triggered a series of crises and risks. The global market, including the Hong Kong stock market, has fluctuated dramatically, reflecting the global concern about the energy crisis, debt crisis, geopolitical crisis and economic downturn. All kinds of commodities have soared while stock markets in various countries have plunged.
Secondly, China concept stocks are worried about transmission. In December 2021, the SEC announced that it had passed the amendment and introduced the detailed rules of the Foreign Company Accountability Act. On March 11, US time, the SEC listed five Chinese concept companies on the tentative list of the Foreign Company Accountability Act. Companies listed on the list for three consecutive years will be prohibited from listing and trading. Chinese concept shares fell sharply, followed by Hong Kong shares. There was an obvious stampede caused by capital flight.
Third, the allocation of some foreign capital is reduced. Looking back at the market situation over the past year, since March 2021, the short selling value of open positions in Hong Kong shares has shown an upward trend, and since 2022, it has risen to near a historical high. The market is highly bearish and extremely pessimistic. At the same time, European and American funds have reduced the allocation of Hong Kong stock market in order to comprehensively reduce their equity positions.
"Western countries' sanctions against Russia have also triggered a panic of cross-border investment, and investment confidence has dropped to the freezing point, which has led to an emergency of foreign investment and accelerated the sale of overseas assets. For the Hong Kong market with a large number of 'foreign' products, they have suffered the most direct negative impact." Hang Seng Qianhai Fund further explained, This reflects the current continuous decline in the Hong Kong stock market.
"On the whole, the current decline in the share prices of Hong Kong stocks and China Concept stocks is more affected by the news and emotional trading, but high-quality companies still have a solid fundamental foundation, which has little to do with the valuation itself," said a researcher from a fund company in North China.
Defense or counterattack
For Hong Kong stocks, if you enter the market at this time, will it be difficult to escape the decline in the future, or will you grasp the wonderful time for the counter attack?
"Whether from the perspective of technical indicators or the extent of withdrawal, Hong Kong shares have limited downward space in the future, and the long-term allocation value has been highlighted." Qu Shaojie said.
He judged that the valuation of Hong Kong shares has been at the bottom of history, and the degree of capital crowding has also been greatly reduced. However, after more than a year of downward cycles, the market continued to decline, which has deviated from the fundamentals to a certain extent, but is relatively more affected by emotional factors, with some overreaction. The continuous decline also ignored the positive policies formulated during the two sessions and the GDP growth target of 5.5%.
Qu Shaojie believes that if a monthly loss turns out to be a good one, the current Hong Kong stock market has a good price performance ratio from the perspective of valuation and chips, or provides a good entry opportunity for stable long-term investors, so we can focus on the strategic allocation value of Hong Kong stock assets from a long-term perspective.
"The current state of the Hong Kong stock market may be an opportunity." The fund manager said frankly that he was optimistic about the future market, especially Hong Kong stocks. The reason is that "its valuation is cheap enough and the implied yield is considerable".
Luo Shifeng, manager of Nord Fund, analyzed from the perspective of valuation, and found that the cost performance ratio of global fund allocation in Hong Kong stocks has gradually become prominent. From the medium and long term perspective, he still maintains a relatively optimistic attitude, and insists on the industry allocation in a relatively long-term perspective. The investment portfolio is dominated by the large consumption and pharmaceutical industries, and is supplemented by the allocation of technology, manufacturing and other sub industries with global competitive advantages.
Although Hong Kong shares have undergone substantial adjustments and their valuations are at historic lows, Hang Seng Qianhai Fund pointed out that under the influence of tighter liquidity, foreign geopolitics and other factors, it is expected that the market will remain volatile, and the rotating market between sectors will also continue.
In the sector, the company suggested to focus on some undervalued industries related to the "stable growth" policy in the short term, as well as industries with a high probability of being revalued in the Hong Kong market, such as green power, energy storage and other sectors, and also pay attention to industries that may be given policy support after being affected by the downward pressure of the economy, such as consumer and financial industries, But avoid industries and companies that are highly influenced by industrial policies and political factors.
However, Bosera Fund pointed out that at present, the fundamentals of Hong Kong stocks are still subject to the dual repression of macro demand and regulation, the financial report of the heavyweight stock Q4 is under pressure, and the trading sentiment is also subject to the impact of the US Foreign Company Accountability Act. The short-term Hong Kong stocks continue to fluctuate at the bottom as a whole, and the repair of core assets depends on the demand recovery and policy clearance after the steady growth takes effect.
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