Source: Finance Association
Author: Hu Jiarong
What was the overall position of public funds in the third quarter?
What do you think of the Hong Kong stock market in the future?
The overall trend of Hong Kong stocks in the third quarter weakened.$Hang Seng Index (800000.HK)$The cumulative decline was 5.85%. However, CICC pointed out that public funds bucked the trend and increased their holdings in Hong Kong stocks, with biomedical holdings increasing significantly.
Public Hong Kong stock holdings bucked the trend and increased in the third quarter, and were higher than the overall southbound market
Through statistics on 3,237 public funds that can invest in Hong Kong stocks in the mainland (excluding QDII), CICC found that 3237 public funds held Hong Kong stocks with a market value of 386 billion yuan, up 4.2% from RMB 370.4 billion in the second quarter.
CICC pointed out that considering this period, the Hang Seng Index fell 5.9%, and Hang Seng Technology also closed up only slightly by 0.2%. This indicates that overall public funds may be actively increasing their holdings in Hong Kong stocks.
Public fund holdings in Hong Kong stocks rose 2.3%
Currently, public fund holdings in Hong Kong stocks account for 20.6% of total holdings, up 2.3% from 18.3% in the second quarter. Looking further at active-biased equity funds, Hong Kong stocks held 274.9 billion yuan in the second quarter, which was also higher than the 267.8 billion yuan in the second quarter. The share of holdings rose to 18.4% from 16.5% in 2Q23.
The holdings of leading biomedical companies have increased significantly, and food, beverage and utilities have declined
Judging from the industry allocation, the share of biomedicine, energy, diversified finance, and technology hardware has increased; the share of media and entertainment, utilities, and food and beverage has declined. The overall position share of the new economy fell to 69.2% from 70.7% in the second quarter, while the share of the old economy increased 1.5 percentage points to 30.8%.
By industry segment, biomedicine, energy, diversified finance and technology hardware had the highest increase in holdings; media and entertainment, utilities, and food and beverage declined the most.
CICC pointed out that the positions of leading biomedical companies have increased markedly, and the dispersion of positions has increased. At the level of individual stocks, mainland public offerings continue to weigh heavily$TENCENT (00700.HK)$,$MEITUAN-W (03690.HK)$,$CNOOC (00883.HK)$versus$CHINA MOBILE (00941.HK)$Wait for leading companies. However, compared to the second quarter,$WUXI BIO (02269.HK)$,$KUAISHOU-W (01024.HK)$CNOOC ranked in the top three in terms of market value growth in holdings, Tencent,$BYD COMPANY (01211.HK)$and$CHINA RES BEER (00291.HK)$Market capitalization declined the most. Meanwhile,$INNOVENT BIO (01801.HK)$versus$XPENG-W (09868.HK)$Replaced$SMIC (00981.HK)$Together with China Resources Brewery, it has entered the top ten heavy-held stocks, and the number of funds held by Pharmaceuticals Biotech and Cinda Biotech has also increased significantly.
What do you think of the subsequent market?
CICC pointed out that in the third quarter of 2023, both Hong Kong stocks and A-share markets “broke” and declined. On the one hand, because interest rates on US bonds exceeded expectations, and on the other hand, because domestic growth and policy expectations weakened again, and the market was even worried that the possibility of introducing further policy support declined for a while.
The latest change now is that leveraging by the central government has taken a critical step in the direction of “symptomatic treatment.” Its importance is probably greater than other policies introduced since the end of July. It helps to ease market concerns about weak policies, and also helps deal with the problems of leverage and credit contraction. If the scale is larger in the future and is further optimized in line with the real estate policy, it may bring better results.
All in all, Hong Kong stocks are currently at the “bottom of the policy,” but considering that this year has been repeated many times and external disturbances still exist, it may take some time to digest before gradually transitioning to the “bottom of sentiment” and the “bottom of the market.”
CICC pointed out that if more stimulus and strength are increased in the future, compounded by the lower valuations, sentiment, and positions of Hong Kong stocks, it will not be difficult for a wave of rapid rebound to occur. At this time, we can focus on overfalling rebound and more flexible sectors, such as biotechnology, the Internet, and new energy. However, more sustained upward potential may also require continued policy support to form a virtuous cycle and a positive upward trend. Until then, the brokerage firm reiterated a dumbbell strategy that combines offense and defense (high dividends and high-quality growth stocks).
editor/tolk