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Source: Securities China
Hong Kong stock ETF share has risen!
This year, the Hong Kong stock market of Hong Kong stocks has continued to be weak. The Hang Seng Index fell below 16,500 points on October 13, setting a new low since October 2011; the Hang Seng Technology Index also fell, falling to a new low since 2020. Many ETFs tracking the two indexes have lowered their net value this year, but their share of funds has continued to rise. Looking ahead to the fourth quarter, many fund managers believe that the current opportunities in the Hong Kong stock market outweigh the risks, and are waiting for the catalyst.
buys more and more as the price falls, funds flow into Hong Kong stock ETF
Since the beginning of this year, Hong Kong stocks have generally shown a downward trend, with the Hang Seng Index falling 29.11%, and the Hang Seng Technology Index falling 43.46%. Many ETFs tracking the Hang Seng Index and Hang Seng Technology Index have also seen a decline in the net value growth rate of re-equipment units this year, but the fund shares have continued to rise, and the overall trend is "buy the more you fall."
Specifically, the net value of many ETFs tracking the Hang Seng Index fell by about 20% this year, but the overall share of the fund continues to grow. For example, the net value of the Huaxia Hang Seng ETF fell by more than 20% this year, with a share increase of 5.176 billion shares, a share change rate of 53.78%, and a net inflow of nearly 6 billion yuan this year.
There are also many ETFs tracking the Hang Seng Technology Index that have dropped by about 37% this year, while fund shares have increased by more than triple. For example, the net value of Huaxia Hang Seng ETF fell by 37.92% this year, with a share increase of 16.903 billion shares, with a share change rate of 205.79%, and the net inflow of funds exceeded 9.3 billion yuan this year; the relatively small Boshi Hang Seng Technology ETF and Dacheng Hang Seng Technology ETF reached 273.14% and 246.04% respectively, with a net inflow of funds of 550 million yuan and 926 million yuan respectively.
It is particularly noteworthy that the Hong Kong pharmaceutical sector has continued to be sluggish since the beginning of this year, but the share of related ETFs has increased. For example, the net value of Boshi Hang Seng Healthcare ETF fell by 32.82% this year, with a share increase of 9.302 billion shares, a share change rate of 739.53%, and the net inflow of funds exceeded 4.8 billion yuan this year.
Hong Kong stocks are waiting for catalyst
Regarding the recent overall sluggish performance of the Hong Kong stock market, many fund managers said that the market is closely related to overseas market volatility, and we need to pay attention to related catalyst events in the future. Judging from the current level, the upside space is greater than the risk of decline.
Hang Seng Qianhai Hong Kong Stock Connect Selected Mixed Fund Manager Xing Cheng said that Hong Kong stocks have undergone significant adjustments in recent days, mainly due to the concerns of interest rate hikes and the performance of overseas markets. The strength of the US non-agricultural sector exceeded market expectations, increasing the probability of the Federal Reserve's , the Fed's hike again, the overall investment preference of Hong Kong stocks has converged, and risk aversion has increased. Before the marginal improvement of relevant factors, it is expected that the Hong Kong stock market may be in a continuous consolidation in the short term.
He said that the next important observation point may be whether the Fed's attitude will turn marginally after the future rate hike is implemented, which will affect the flow trend of overseas funds in the fourth quarter, and in turn will affect the pricing of the Hong Kong market.
Dacheng Hang Seng Technology ETF fund manager Ran Linghao recently said that since September 19, the Hang Seng Technology Index has continued to maintain a downward momentum, during which the index hit a new low since 2020. Correspondingly, the Nasdaq Index and the A-share ChiNext Index have also experienced a certain degree of decline. He believes that the current level of upward space is greater than the downward risk, and investors are advised to pay attention to potential catalysts.
Guohai Franklin Fund believes that due to the situation in Ukraine and the impact of the Federal Reserve's interest rate hike in , Hong Kong stocks generally showed a volatile downward trend in the third quarter. The current valuation is at a relatively low historical level, and the market is quite attractive. Looking ahead to the fourth quarter, as the price of commodities falls, the inflation pressure in the United States will weaken month-on-month. Domestic measures to stabilize growth will be gradually implemented, and real estate sales are expected to increase month-on-month. Considering that the downstream industrial chain of the real estate industry is long, the driving effect on the economy is relatively obvious; and the epidemic has been well controlled, and consumption will gradually return to normal; given the current active monetary policy and fiscal policy, macroeconomic is likely to stabilize and rebound.Guohai Franklin Fund believes that corporate performance in the fourth quarter is expected to improve month-on-month, with the overall valuation of Hong Kong stocks being low, and sectors such as finance, property, automobiles, the Internet, pharmaceuticals and real estate post-cycle have good opportunities, and the opportunities in Hong Kong stocks outweigh the risks.
Haitong Securities strategy team believes that Hong Kong stocks bottomed out and rebounded, need to wait for A-shares and U.S. stocks to stabilize. For A-shares, domestic economic fundamentals are the key points, among which real estate is one of the important factors. With the implementation of policies on ensuring the delivery of housing and stabilizing growth, it is expected to catalyze a new round of rise in the A-share market, thereby forming a positive pulling effect on Hong Kong stocks.
However, the team also pointed out that it is not clear when the US stock market will bottom out. The NBER indicator shows that the US economy has entered a technical recession in July this year. According to historical rules, US stocks will bottom out in the middle and late stages of the US economic recession. Therefore, it is expected that US stocks will bottom out in the fourth quarter of this year or early next year, which means that US stocks may still have a negative impact on Hong Kong stocks. Since US stocks are hard to bottom out, Hong Kong stocks may need to continue to wait until they bottom out and stabilize, but considering that Hong Kong stocks are already in the bottom area, there is no need to be overly pessimistic about Hong Kong stocks.
Editor: Zhu Yumeng
Proofreading: Gaoyuan
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