Hong Kong stocks can be described as having experienced a week that shocked the world.$Hang Seng Index (800000.HK)$It is expected to be the best weekly trend since 2011. The Hang Seng Index, the benchmark index for the Hong Kong stock market, can be described as having risen sharply since this week. It is expected to achieve a weekly increase of close to 10% at the close of Friday, accompanied by a sharp increase in trading volume and strong momentum. Mainly affected by the background$Microsoft (MSFT.US)$Optimistic incentives brought about by strong profits from US tech giants such as Google, and a series of positive news in the Chinese market, including the approval of Tencent Games, the extension of Chinese developers' bonds, and continued southbound capital inflows under the China Securities Regulatory Commission's relaxation of stock ETF rules under the Shanghai-Shenzhen-Hong Kong Stock Connect.

Judging from various data levels, it can be said that the “beef flavor” of the Hong Kong stock market is getting stronger, driven by favorable financial policies and rising market risk appetite brought about by the strong performance of US tech giants.

From a policy perspective, on the basis of extensive and in-depth research and listening to opinions, the China Securities Regulatory Commission will deepen cooperation with the Hong Kong market, adopt five core measures to further expand and optimize the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism, help Hong Kong consolidate and enhance its status as an international financial center, and jointly promote the collaborative development of the capital markets of the two places. Among them, the focus includes plans to moderately relax the average asset management scale requirements for eligible stock ETFs, reduce the Hong Kong share weight and Hong Kong Stock Connect share equity requirements for Southbound Hong Kong Stock Connect products, make equal adjustments to the Northbound Shanghai Stock Connect and Shenzhen Stock Connect ETF products, and include eligible REITs from the Mainland and Hong Kong in the Shanghai, Shenzhen Stock Exchange, and further enrich the variety of Shanghai, Shenzhen, and Hong Kong Stock Connect transactions by generally referring to the interconnection system arrangements between the two places.

Judging from market risk appetite, after the US market on Thursday, the two giants, Microsoft and Google, surpassed expectations and achieved significant growth in performance indicators across the board, reviving the “AI belief” of global technology stock investors. Tech stock investors' fanaticism about AI may once again set off huge waves in global stock markets. However, the bullish heatwave caused by AI stocks has taken a high weight in Hong Kong stocks$Alibaba (BABA.US)$and$TENCENT (00700.HK)$It is very important when it comes to the stock price trends of internet tech giants.

Statistics show that the Hong Kong Stock Hang Seng Index (“Hang Seng Index” for short) saw a sharp increase in trading volume, that is, it rose, driven by a bullish indicator called “volume”. The index's volume broke through the 200-day moving average. This is a very strong bullish sign, showing that the potential bullish momentum of the market is very strong.

In terms of the scale of capital inflows, the Hong Kong stock market ushered in capital inflows for 20 consecutive days, spurred by favorable policies such as the China Securities Regulatory Commission's relaxation of stock ETF rules under the Shanghai-Shenzhen-Hong Kong Stock Connect.

This week, covering Alibaba, Tencent,$NTES-S (09999.HK)$,$MEITUAN-W (03690.HK)$and$SENSETIME-W (00020.HK)$Waiting for China's top technology companies$Hang Seng TECH Index (800700.HK)$A rare run that includes American tech giants such as Apple, Microsoft, and Google$NASDAQ 100 Index (.NDX.US)$And the runaway margin was the best market performance since the end of 2022.

including Alibaba, Tencent,$Kweichow Moutai (600519.SH)$The MSCI China Index (MSCI China Index), which is China's core stock asset, also rose sharply recently — this MSCI index tracks 704 Chinese companies, with a total market capitalization of 1.8 trillion US dollars. The MSCI China Index is mainly aimed at overseas institutional investors. The index has risen nearly 20% since its January low, which means it is about to enter a “technical bull market” in the general sense. The 20% increase value from the low point to the current point is a “bull market threshold” in the general sense.

A rare increase in UBS! Adjust the MSCI China Index and Hong Kong stock ratings to “increase holdings”

Recently, UBS Group (UBS Group) joined the bullish Hong Kong stock market and the Chinese stock market as a whole, raising the recommended rating for the entire Hong Kong stock market and raising the MSCI China Index, the Chinese stock benchmark index for overseas investors.

UBS upgraded the ratings of the MSCI China Index and the Hong Kong stock market to “increase holdings” due to the company's profit flexibility and strong policy support. In August of last year, UBS downgraded the overall rating of the Chinese stock market, which includes A-shares and Hong Kong stocks, to “neutral.”

According to information, UBS, a major international bank, raised the MSCI China Index rating to an increase. The agency's call to bullish the MSCI China Index comes at a critical moment in the Chinese stock market — thanks to stock market policy reforms, the emergence of economic recovery, and the latest signs of improved corporate profits. The Chinese stock market — that is, A-shares and Hong Kong stocks — is expected to break away from the continuous sluggish performance of the past few years.

UBS stock market strategists, including Sunil Tirumalai (Sunil Tirumalai), wrote in the latest emerging market stock strategy analysis report on Tuesday that the largest constituent stocks in the MSCI China Index performed well overall in terms of profit and fundamentals. UBS also upgraded the rating of Hong Kong stocks to increase its holdings, while downgrading markets with a large share of technology stocks such as South Korea to neutral.

According to the index-weighted earnings per share (EPS) calculation method favored by UBS, the overall EPS of the MSCI China Index has declined by only about 2% over the past 18 months, outperforming other emerging market stock benchmark indices — down about 8%.

According to the report, given the early signs of a recovery in consumption, UBS is currently more optimistic about profit prospects, believing that household savings can be converted into consumption and eventually flow into the market.

UBS (UBS) said that the general earnings per share are distorted by the sum of freely tradable shares. In this case, some companies only account for a small share of the index, but they have great influence in terms of earnings per share.

UBS (UBS) strategist Sunil Tirumalai (Sunil Tirumalai) said: “The stocks with the largest market capitalization in the MSCI China Index performed well overall in terms of profit and fundamentals.” “What makes us more optimistic about corporate profits now is that consumption is showing early signs of recovery. This can be seen from the strong holiday consumption data from the beginning to date and the performance of listed consumer stocks is better than overall consumption in the economy.”

CITIC Construction Investment Securities, a top domestic brokerage firm, released a research report saying that the recent rise in Hong Kong stocks has mainly benefited from capital improvements. Foreign capital is the main force in increasing positions, and the return trend is expected to continue; driven by policies and high dividend markets, southbound capital is also constantly increasing.

CITIC Construction Investment Securities said that recently the focus of foreign capital allocation in the Asia-Pacific region has shifted back from Japan to Hong Kong stocks, and the liquidity of Hong Kong stocks has improved dramatically. In terms of domestic investment, driven by favorable policies and a high dividend market, southbound capital has recently increased dramatically, further consolidating the upward trend of Hong Kong stocks. CITIC Construction Investment Securities believes that the best long window for Hong Kong stocks this year has arrived.

Editor/Jeffrey