Bank of China International released a report stating that the overall performance of the Hong Kong stock market in the upcoming interim season has slightly exceeded expectations, driving the recent structural market trend. In addition, Federal Reserve Chairman Jerome Powell clearly stated during the Jackson Hole meeting that the time for policy adjustments has arrived and the Federal Reserve is about to enter an interest rate-cutting cycle, which also provides favorable liquidity conditions for the rise of the Hong Kong stock market.

The bank observes that the companies with better-than-expected interim results this time are mainly concentrated in the internet platforms and technology hardware sectors. As the profits of growth stocks continue to recover, the bank believes that the market style will gradually shift from value-oriented to a balanced allocation of growth and value, which is also supported by the recent preference of southbound funds. However, the mild interim performance can only support structural market trends, and the future trend and upside potential of the market will still depend on the improvement of China's economic fundamentals, policy expectations, and changes in external risk sentiment.

Among the active stocks in the August Shanghai-Hong Kong Stock Connect, southbound funds have clearly shifted towards growth stocks compared to the previous month. Tencent (00700.HK) showed overwhelming net buying by southbound funds, with a 7% increase in stock price; HSBC Holdings (00005.HK) had the largest net selling by southbound funds, with a 2% decrease in stock price.

Bank of China International statistics show that in the past month until August 26th, southbound funds have net bought the top five Hong Kong stocks, including Tencent, China Mobile (00941.HK), Xiaomi (01810.HK), CNOOC (00883.HK), and Sinic Holdings (02800.HK), with net purchases of 9.764 billion yuan, 1.999 billion yuan, 1.551 billion yuan, 1.305 billion yuan, and 0.829 billion yuan, respectively.

The bank also calculated that in the past month until August 26th, southbound funds have net sold the top five Hong Kong stocks, including HSBC Holdings, China Shenhua Energy (01088.HK), China Construction Bank (00939.HK), Meituan (03690.HK), and PetroChina (00857.HK), with net sales of 2.245 billion yuan, 1.534 billion yuan, 0.768 billion yuan, 0.669 billion yuan, and 0.528 billion yuan, respectively. (wl/k)

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