Southward net capital inflow reached a record high
Compared with a shares, the Hong Kong stock market is not warm this year. As of November 24, the Hang Seng Index has fallen 5.76% this year.
However, the attention of the Hong Kong stock market has been rising rapidly recently, and the buy and buy of southward funds can not stop.
Since November, as of November 23, total purchases of southbound funds have reached HK $55.634 billion, or about RMB 47.608 billion, according to wind data. In 2020, the inflow of southward funds into Hong Kong shares has reached a record high, with a net inflow of HK $597.258 billion, or about RMB 533.489 billion. Since the opening of the Hong Kong stock connect, southbound funds have bought a total of HK $1655.536 billion, or about 1439.843 billion yuan.
Southward funds since this year (HK $100 million)
Data source: wind
Net purchase of southward funds over the years
Data source: wwind 2020 data as of November 23
Since the third quarter, a number of fund companies have actively deployed Hong Kong stocks.
Taking e fund as an example, according to the third quarterly report, the overall increase of e funds holdings in Hong Kong stocks is obvious. As of September 30, the Hong Kong stock allocation proportion of e funds 10 fund products has exceeded 40%. Among them, the Hong Kong stock allocation proportion of e Fund Asia selected by Zhang Kun, held by e fund high-quality enterprises for three years and e fund blue chip selected by e fund all exceeded 40%. Xingquan Heyi, managed by Xie Zhiyu of Xingzheng Global Fund, also increased the allocation ratio of Hong Kong stocks in the third quarter. In addition to meituan review and Tencent holdings already held in the second quarter, Xingquan Heyi also bought BYD shares in the third quarter. The proportion of Hong Kong shares allocated by Qianhai Kaiyuan, Shanghai, Hong Kong and Shenzhen value selection increased from 4.81% at the end of the second quarter to 37.06% at the end of the third quarter.
In addition, a number of fund companies are or will soon issue Shanghai, Hong Kong and Shenzhen funds. Chuang Jin Hexin fund is issuing a quantitative Hong Kong stock connect, while deppon fund and China Southern Fund are about to issue Debang Shanghai, Hong Kong and Shenzhen leader and Southern Shanghai, Hong Kong and Shenzhen core advantages.
Hong Kong shares have obvious valuation advantages
China Merchants Fund pointed out that at present, the cost performance of Hong Kong stock investment is at a historical high. Wind data shows that the Shanghai Hong Kong ah premium index, the main indicator of ah share price comparison, surpassed the 2015 high of 152.03 points in early October, reaching 154.23 points, a new high in the past 10 years, and the index is still fluctuating near the high level.
Recent trend of Shanghai Hong Kong ah premium index
Data source: wind
Guo Chengdong, general manager of deppon funds overseas and portfolio investment department, pointed out that in the past three years, the ecological changes of Hong Kong stocks have quietly opened up, and the market structure has undergone great changes and leaps. In the first half of 2018, the Hong Kong Stock Exchange amended the rules to allow unprofitable biotechnology companies to be listed in Hong Kong stock market, which has become a hot spot in the market in recent years. In 2019, companies with the same share and different rights can be listed in Hong Kong, which opens the tide of China capital stock returning to Hong Kong stock market. In early September 2020, the Hong Kong Stock Exchange proposed for the first time that companies listed in two places and companies with different rights in the same share could be included in the Hang Seng Index The proportion increased significantly.
Guo Chengdong also introduced that on the evening of November 13, the Hang Seng index released the quarterly index adjustment results as usual. From this index adjustment, we can see that the proportion of the new economy is increasing. Benchmarking: when the Hong Kong stock connect was just opened in 2014, the financial industry (wind class I industry classification) accounted for 47%, and in 2016, the weight of the financial industry still accounted for 46.8%. After this round of adjustment, the proportion of the financial industry decreased to 32%, and the proportion of optional consumption and information technology accounted for 46%. The three-year active adjustment has brought a lot of high-quality assets to Hong Kong stocks. In the future, the increase of leading targets of high-quality new economy, combined with the systematic recovery of corporate profits and the continuous inflow of capital, is also expected to change the situation of long-term valuation discount and insufficient earning effect of Hong Kong stock market.
Valuation or rise next year
Generally speaking, there is a positive attitude towards future investment institutions in Hong Kong.
Deppon Fund believes that when the exchange rate risk has been reflected in the valuation, the attractiveness of the current Hong Kong stock market for funds has begun to reflect. Next year, with the basic orientation of the market and the increase of investment targets in the new economy, there is still room for the valuation of Hong Kong stocks to rise.
In terms of allocation direction, China Merchants Fund suggests following the following three major ideas for market layout: first, the pro cyclical sector has good profitability certainty, it can follow the main line of manufacturing investment and repair, and pay attention to the advanced manufacturing sector and the banking sector with high neutral price in the financial sector. Second, with the recovery of investors risk preference, the semiconductor and consumer electronics sectors which were suppressed in the early stage have better repair space. Third, as consumption data continues to pick up, the vaccine process beyond expectations will also have a further catalytic effect on optional consumption. It is recommended to focus on automobile, catering, gambling and other sectors. Li yaozhu, head of GDFs international business department, is relatively optimistic about the investment opportunities in the Internet industry of Hong Kong stocks. He said that Chinas digital transformation still depends on Internet companies for data structure and application. Moreover, the stricter regulation of the Internet industry will enable the industry to get more standardized and long-term development. Editor: Xu Xiaohong source: China Securities Journal Author: Xu Jinzhong Wanyu editor in charge: Zhong Qiming_ NF5619
In terms of allocation direction, China Merchants Fund suggests following the following three major ideas for market layout: first, the pro cyclical sector has good profitability certainty, it can follow the main line of manufacturing investment and repair, and pay attention to the advanced manufacturing sector and the banking sector with high neutral price in the financial sector. Second, with the recovery of investors risk preference, the semiconductor and consumer electronics sectors which were suppressed in the early stage have better repair space. Third, as consumption data continues to pick up, the vaccine process beyond expectations will also have a further catalytic effect on optional consumption. It is recommended to focus on automobile, catering, gambling and other sectors.