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美联储降息周期启动,资金涌入中国资产!哪些港股已率先发力?

The Fed has started an interest rate cut cycle, with funds flowing into Chinese assets! Which Hong Kong stocks have taken the lead?

Futu News ·  Sep 18 18:57

With the stimulus of the imminent rate cut by the Federal Reserve, Chinese assets have recently shown explosive momentum. The Hang Seng Tech Index has risen for five consecutive trading days, and this month several bull stocks have taken the lead in the market, with medical care stocks up more than 47% and auto stocks up more than 26%. In addition, sectors such as utilities and industrials have also seen several stocks perform well. $AKESO (09926.HK)$ Market funds, including southbound funds, continue to flow into the Hong Kong stock market, and the widespread buyback bullish news of listed companies in Hong Kong has continued to drive the upward trend of the market. With the combined forces of funds, valuations, performance, and policies, will Hong Kong stocks welcome a new spring?$NIO-SW (09866.HK)$ Under the stimulus of the imminent rate cut by the Federal Reserve, Chinese assets have recently shown explosive momentum. The Hang Seng Tech Index has risen for five consecutive trading days, and this month several bull stocks have taken the lead in the market, with medical care stocks up more than 47% and auto stocks up more than 26%. In addition, sectors such as utilities and industrials have also seen several stocks perform well.

Market funds, including southbound funds, continue to flow into the Hong Kong stock market, and the widespread buyback bullish news of listed companies in Hong Kong has continued to drive the upward trend of the market. With the combined forces of funds, valuations, performance, and policies, will Hong Kong stocks welcome a new spring?

The imminent rate cut by the Fed, with funds continuously inflowing into the Hong Kong stock market, what are the reasons that the rate cut is bullish for Hong Kong stocks? How should the stock allocation in Hong Kong be adjusted?

With the combined forces of funds, valuations, performance, and policies, will Hong Kong stocks welcome a new spring?

As the Federal Reserve cuts interest rates, it is generally expected that this will have a positive impact on Hong Kong stocks. The main reasons for this include improved liquidity, increased valuations, the Hong Kong Linked Exchange Rate System, and positive company performance.

Firstly, the interest rate cut by the Federal Reserve is expected to attract more incremental capital into the Hong Kong stock market. According to institutional analysis, the interest rate cut by the Federal Reserve will to some extent weaken the US dollar index, causing outflows of US dollars to other global stock markets. Since the Hong Kong stock market is dominated by foreign capital, loose peripheral currencies will drive the narrowing of China-US interest rate differentials and strengthen the renminbi exchange rate, thereby attracting external funds into the Hong Kong stock market.

In addition, the view that Hong Kong stocks are currently undervalued is gradually becoming a market consensus. Data shows that the current price-to-earnings ratio (TTM) of the Hang Seng Index is 8.54 times, with the lowest value since 2010 being 7.36 times and the median being 10.28 times. Even the state-owned enterprise index, which has benefited from the high-dividend stock market rally this year, has a current valuation multiple of only 7.64, still lower than the median level of 8.79 times since 2010.

Furthermore, Hong Kong stocks have greater resilience in their recovery due to their sensitivity to changes in external liquidity. Hong Kong implements a linked exchange rate system with the US dollar, and the spillover effects of the Federal Reserve's monetary policy have a stronger impact on Hong Kong stocks.

Finally, interest rate cuts will significantly reduce corporate financing costs, and companies will gradually increase their financial leverage. This will expand social production activities and stimulate the economy. When foreign countries enter the replenishment stage, the recovery of external demand will drive China's export-related businesses, thereby boosting the performance of listed companies.

Reviewing the historical 9 interest rate cut cycles, this round is most similar to 2019, as both are precautionary interest rate cuts. Looking at the market performance at that time, after the first interest rate cut, Hong Kong stocks initially fell and then rose, followed by an upward trend, with the Hang Seng Tech Index showing the most significant resilience.

With the interest rate cut by the Federal Reserve, which industries in the Hong Kong stock market will benefit more?

For industries that benefit from the interest rate cut, institutions generally recommend technology, consumer, and medical care sectors, which are sensitive to interest rates, as well as long-term themes such as high dividends and share buybacks.

China International Capital Corporation believes that after the Fed rate cut, the short-term growth sectors benefiting from the rate cut may have higher elasticity, such as semiconductors, autos (including new energy), media and entertainment, software, biotechnology, etc.

However, in the medium term, the structural market of range-bound volatility remains the main theme. The current 10-year t-note rate has fallen to 3.7%, incorporating the rate cut expectations to a more sufficient extent. If the risk premium returns to the level of last year, the corresponding Hang Seng Index is approximately 19,000; if profits grow by 10% on this basis, the corresponding Hang Seng Index is at 21,000. In the medium term, dividends + technology growth are the main theme: bullish on stable high dividend and high buyback stocks, as well as technology growth stocks that have their industry prosperity (internet, gaming, education) or policy support (technology hardware and semiconductors).

CITIC Securities believes that looking back at historical performance, a significant upward trend in the Hang Seng Index has been observed one month before and after the preemptive rate cut; by industry, growth-oriented medical care, consumption, and pro-cyclical energy materials, financial and real estate sectors often show good performance one month before and after the rate cut.

Analysts at CCB International believe that the focus of the Hong Kong stock market is on dividend-paying stocks, including domestic banks, domestic insurers, Chinese telecommunications, and energy; in the technology sector, some large-cap weighted stocks, mobile games, consumer platforms, although not paying dividends, with the rate cuts in Europe and the United States, funds will flow to Asia, such as Japan, Taiwan, South Korea, etc., as long as funds continue to stay in Asia, there is an opportunity to pay attention to or even flow into undervalued Hong Kong stocks. Large-cap weighted technology stocks should benefit from this.

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