In the past two days, it has become more and more obvious that North Water is accelerating its inflow into Hong Kong stocks.

The total turnover of southbound Hong Kong Stock Connect reached HK $889.1 billion in August, up 71 per cent from a year earlier. Although southward capital sold nearly HK $20 billion that month, the scale of marginal net reduction slowed significantly and returned to Tencent since the middle and last ten days, buying a net HK $5.5 billion a month.

On September 6th, southbound Capital ended its eighth consecutive net sale and bought a net HK $2.096 billion of Hong Kong stocks. Among them, Tencent bought more than 900 million Hong Kong dollars net from Beishui.

On September 7, southbound capital inflows accelerated late in the day, with net purchases reaching HK $4.066 billion. Meituan, Tencent and Kuaishou Technology received a net purchase of HK $995 million, HK $868 million and HK $449 million respectively.

CITIC said a few days agoWith the new round of Hong Kong Stock Connect stock list adjustment and landing, southbound funds are expected to return to the Hong Kong stock market.

On September 6, the Shanghai Stock Exchange and the Shenzhen Stock Exchange announced the semi-annual stock adjustment list of Hong Kong Stock Connect. This time, the 15 new stocks are concentrated in the "new economy" sectors such as health care, consumption and technology. There is no lack of companies with high market attention, such as Angelalign Technology Inc., Kuaishou Technology, and Nai Xue's tea.

In addition, the adjustment of the Hang Seng Index also took effect on September 6: the Hang Seng State-owned Enterprises Index newly included Li Ning Co. Ltd. and JD Logistics, Inc.; the Hang Seng Technology Index newly included Trip.com; and the Hang Seng Index newly included Li Ning Co. Ltd., Xinyi Glass and China Merchants Bank. After this adjustment, the number of constituent stocks in the Hang Seng Index increased to 60.

CITIC said that under the new framework, in order to maintain the stability of the index stocks in the short term, some companies with larger market capitalization are not included, but in the long run, more leading companies in the "new economy", such as consumption and pharmaceuticals, are expected to be transferred to the Hang Seng Index.

The agency believes that after this adjustment,"New economy" further increases the weight of the Hang Seng Index (now: 46% vs early 2020: 20%)It is expected that the Hong Kong stock market will gradually show its performance-to-price ratio in the process of "bottoming out".

Looking to the future, the investment scope of "interconnection" is expected to usher in further expansion, and the first batch of dual major listed companies XPeng Inc. and Li Auto Inc. will be included in the Hong Kong Stock Connect in early February 2022 at the earliest.

The rebound in Hong Kong technology stocks also attracted southward capital inflows.Since hitting a recent low at the end of August, the Hang Seng Technology Index has rebounded by more than 19%. In terms of constituent stocks, Kuaishou Technology has rebounded nearly 58% from this year's lowest point, Bilibili Inc. has rebounded by 44.7%, Meituan by 35% and Tencent by 22.5%.

Among them, the rebound is the biggest.Kuaishou Technology has recently received a substantial increase in the position of southbound funds.During the period from last Thursday to 7 September, the cumulative net purchase amount was HK $1.839 billion; Tencent received a net purchase of HK $1.807 billion in the first two days of this week.

Annex: stocks with large changes in the proportion of Hong Kong stocks in August