Since the beginning of this year, overseas central banks have disturbed the rate hikes of Hong Kong stocks . The Hang Seng Index has pulled back 36% in the year, and the valuation has fallen to a historical lowest level of 7 times. However, last week, Hong Kong stocks experienced a long-lost sharp rebound, with the weekly increase of and hitting a record high.
Compared with the previous "internal and external troubles", investors' views on Hong Kong stocks have undergone a positive change recently. So, on the one hand, there is the uncertainty of the overseas interest rate hike , and on the other hand, the domestic economic recovery is still facing challenges. Is the dawn of Hong Kong stocks really coming?
1
Extreme Reversal , from improvement in market sentiment. Last week, the Hang Seng Index rose 8.73%, the largest single-week increase since October 2011. The Hang Seng Technology Index rose 15.63%, the largest single-week increase in history. All industries generally rose, with technology, medical care and consumption leading the rise. The main catalyst for this round of rebound comes from investors' optimism about domestic epidemic prevention and control policies, and foreign media reports that China and the United States have made progress in audit , which has improved the market's pessimism.
2
Hong Kong stocks have global liquidity, while fundamentals mainly look at the domestic market. In this year's overseas central bank interest rate hike, led by , the strengthening of the US dollar has restricted the liquidity and sentiment of Hong Kong stocks, and Hong Kong stocks have experienced rapid compression of valuation. However, from historical experience, the Hang Seng Index closed higher during the full Fed rate hike cycle, and the upward trend of corporate profits is an important support factor.
3
The Fed is still struggling with the risk of high-stick inflation and economic slowdown, but the most radical moment of this round of interest rate hike may have passed. The rise in US core inflation has given the "necessity" to raise interest rates, and the strong labor market has given the "confidence" to raise interest rates. However, the U.S. manufacturing, real estate and other fields have shown more and more signs of slowing down, giving the market "hope" to expect the Federal Reserve to slow down interest rate hikes.
4
Foreign capital, local funds and southbound funds are the three pillars of the Hong Kong stock market capital side. Foreign capital has flowed out of Hong Kong stocks this year, behind which the Federal Reserve raises interest rates and the return of the US dollar. Currently, active foreign-funded institutions have significantly lowered Hong Kong stocks. If the Federal Reserve's tightening policy declines in the future, the RMB exchange rate of and will stabilize, and the pressure of further outflow of foreign capital is also expected to ease.
5
Hong Kong dollars is a traditional faucet of Hong Kong stocks, and it has passed the time when liquidity is extremely exhausted. Before the launch of Shanghai-Hong Kong Stock Connect , the Hang Seng Index and Hong Kong dollar M2 were highly correlated year-on-year. It can be seen that the Hong Kong dollar M2 has been pulled out of the quagmire of negative growth year-on-year, and this period pointed to by this data is a period when the market continues to bottom out and gradually recovers.
6
southward funds are accelerated to provide support for Hong Kong stocks. 's ultra-low valuation Hong Kong stocks have increased their attractiveness to southbound funds, accelerating a net inflow of RMB 31.5 billion last week, the largest single-week inflow since February 2021, and the ninth consecutive week of net inflow since the end of August. Currently, Hong Kong stocks are in the bottom range of performance, and with the expected improvement in performance, the southbound funds are expected to continue to flow in.
7
valuation has reached an extremely low level in history. Rationality will be late but will not be absent. The two representatives of the "new and old" economy of Hong Kong stocks have reached an extremely low level in history. Finance: After being run over by the wheel of the times, the valuation has hit new lows, and the current water level has fallen to 0.6%. Technology: After the "kill logic" in the Internet industry, it has become a mess. Against the backdrop of the upward movement of the center, its valuation has also reached the low level during the 2008 financial crisis.
8
A "stories" data: the year-on-year growth rate of Hong Kong stock repurchase is at a high level since 2009. repurchase data contains management's outlook on the company's operations and current valuation, and shows that the company has sufficient cash or credit sources. From the current perspective, the year-on-year growth rate of Hong Kong stock repurchase amount has been at a high level since 2009, which also indirectly reflects the confidence of the management.
9
As the Federal Reserve's interest rate hike enters the second half and some pessimism is gradually released, the market's focus may gradually return to the domestic economy and corporate profit fundamentals. The domestic economy and policy margins are improving, the historical "extreme" valuation of the Hong Kong stock index, and the accelerated layout of southbound funds may constitute positive factors for the upward support of Hong Kong stocks.
0
Never waste a crisis, even if you have tears in your mouth, you must lay your bargaining chips. Although the presentation of bubbles and crises is different, they always follow the same rhymes, and the rules behind them are consistent "Everything will turn back, and the worst will come." This is also a natural unchanging law.
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