Source: Dai Qing Strategy Research
Author：Dai Qing，Huang Kaihong
With the support of a series of policies, domestic economic data has improved marginally. Overseas, the European Central Bank raised interest rates by 25 basis points, 10-year US bond yields and the US dollar index remained high, and overseas liquidity was still tight. From July 21 to September 15, while there was an overall net outflow of foreign capital, the net inflow of southbound capital into the Hong Kong stock market accelerated. Looking at the industry side, there is a net inflow of southbound capital into industries such as finance, real estate, energy, and the Internet of Technology, while the net outflow of foreign capital flows out of industries such as software and services, banking, and retail. In the future, once overseas liquidity is marginally relaxed, there may be a need for foreign capital to make up for these industries.
1. The bottom of the domestic economy stabilized, and the margin of overseas liquidity tightened
The bottom of the domestic economy confirmed that the overseas liquidity environment was marginal and that Hong Kong stocks fluctuated overall.Economic data released domestically showed a recovery in consumption, investment, and production. Meanwhile, the Central Bank of China announced a 25 basis point downgrade on September 14, which will help support the real economy to continue improving its trend. Overseas, the US CPI growth rate rebounded 0.7% month-on-month in August, slightly exceeding market expectations. Among them, the acceleration of the energy segment was the main contribution to the month-on-month rebound in CPI; the core CPI growth rate fell back to 4.3% year-on-year. We believe that the impact of the oil price pulse from the supply side may subside, and it is expected that the US inflation center will still show a downward trend in the future. Furthermore, the ECB raised the main refinancing interest rate, deposit facility interest rate, and marginal loan interest rate by 25 basis points. The overseas liquidity environment was marginally tightened last week, from September 7 to September 15.$Hang Seng Index (800000.HK)$The cumulative decline was 0.11%,$Hang Seng TECH Index (800700.HK)$Decreased by 0.34%.
Judging from the capital environment, the liquidity environment in the Hong Kong stock market has tightened marginally.From September 7 to September 15, 10-year US Treasury yields rose 7.0 basis points to 4.34%. The US dollar index rose 0.3 points to 105.33; the RMB rose from 7.32 to 7.27 against the US dollar. The 3-month Libor interest rate rose by 35.0 basis points, the Libor-Hibor spread narrowed by 32.3 basis points, and the Hong Kong dollar rebounded to 7.82 against the US dollar.
At the same time as there was a net outflow of foreign capital, there was a net inflow of southbound capital into the Hong Kong stock market one after another.In fact, since July 21, capital has flowed out to the north, while capital inflows to the south have accelerated, with a cumulative net inflow of HK$110.67 billion. The AH premium for Shanghai, Shenzhen, and Hong Kong rose to 143.84, exceeding the standard deviation of 1 times above the historical average for the past 10 years. From September 7 to September 15, the market value of the main board of Hong Kong stocks rose by HK$53.7 billion. The short selling ratio on the main board of Hong Kong stocks fell back from 21.3% to 15.3%.
2. In terms of capital flows in the secondary sector of Hong Kong stocks
1) Southbound funding
From July 21 to September 15, there was a cumulative net inflow of southbound capital of HK$110.68 billion, with the largest net inflows into the financial, real estate, energy and technology Internet industries.Southbound capital flowed into almost all sectors of the Hong Kong stock market. The top 6 net inflows were the banking, real estate, energy, pharmaceutical, insurance and retail industries; only the food and main goods retail sector had a net outflow of HK$119 million. Judging from changes in industry voice, the six industries where southbound capital discourse has increased the most are media, pharmaceuticals, energy, materials, semiconductors and equipment, and insurance.
2) Foreign intermediary funds
In the same period, there was a net outflow of capital from foreign intermediaries of HK$77.29 billion, with the largest net outflow from industries such as software and services, banking and retail.The top 6 industries with net inflows of foreign intermediaries are consumer services, durable goods and clothing, insurance, diversified finance, healthcare services, and food and major goods retail industries; the top 6 industries with net outflows of foreign intermediary capital are software and services, banking, retail, telecommunications services, real estate, and energy. Judging from changes in industry voice, the industries where the voice of foreign intermediaries has increased the most are media, consumer services, pharmaceuticals, and consumer durables and clothing.
3) Northbound Funding
The total net outflow of northbound capital was RMB 65.79 billion, with the largest net outflow from the food and beverage, technical hardware, and semiconductor industries.The top 6 industries with net capital inflows to the north were diversified finance, pharmaceuticals, automobiles and components, durable goods and clothing, energy and retail; the top 6 industries with net outflows of northbound capital were food and beverage, technical hardware and equipment, semiconductors and equipment, banking, materials, and healthcare services. Judging from changes in industry discourse, the six industries where the voice of northbound capital has increased the most is diversified finance, pharmaceuticals, durable goods and clothing, automobiles and components, media, and energy.
In the Hong Kong stock market, the biggest consensus is the net inflow of domestic and foreign capital into industries such as insurance and diversified finance; the difference is that there is a net inflow of southbound capital into the banking, real estate, and retail industries, while there is a net outflow of foreign capital.Specifically, the biggest consensus between southbound capital and foreign intermediary capital for Hong Kong stocks is that southbound capital and foreign capital all have net inflows into industries such as insurance, diversified finance, durable goods and clothing, consumer services, healthcare services, and media; in terms of differences, there is a net outflow of southbound capital into industries such as banking, real estate, energy, retail, software and services, and telecommunication services.
In terms of foreign investment, the biggest consensus between foreign intermediary capital and northbound capital is that they both have net outflows from industries such as banking and software services.Specifically, the biggest difference between foreign intermediary capital and northbound capital is that foreign intermediary capital flows into industries such as consumer services, insurance, healthcare services, and media, and the net outflow from the retail, energy, automobile and parts, and pharmaceutical industries, while the northbound capital flows in the opposite direction; in terms of consensus, both foreign intermediary capital and northbound capital have net inflows into durable consumer goods, clothing, and diversified financial industries, all of which have net outflows from banking, software services, food and beverages, technical hardware and equipment, telecommunication services and real estate.
3. Statement of capital flows for individual stocks
Judging from the trend of capital flows to individual stocks, southbound capital favors individual stocks related to “medium overvaluation” + “high dividend”.Specifically, what is the individual stock with the highest net inflow of southbound capital$MEITUAN-W (03690.HK)$(HK$5.77 billion),$CCB (00939.HK)$(HK$5.54 billion),$YANKUANG ENERGY (01171.HK)$(HK$4.94 billion),$CHINA MOBILE (00941.HK)$(HK$4.26 billion), ICBC (HK$4.14 billion) and$CNOOC (00883.HK)$(HK$3.79 billion).
In the same period, the net outflow of foreign intermediary capital was mainly from growth stocks.What is the individual stock with the largest net outflow of capital from foreign intermediaries$TENCENT (00700.HK)$(-HK$14.81 billion), Meituan (-HK$5.77 billion), China Mobile (-HK$-5.2 billion),$MOG DIGITECH (01942.HK)$(HK$4.62 billion), China Construction Bank (-HK$4.5 billion) and$XPENG-W (09868.HK)$(-HK$4.49 billion).
4. Risk Reminder
1) Domestic economic recovery has fallen short of expectations; 2) the Federal Reserve has tightened beyond expectations.
Editor/Somer