Benefited from multiple favorable factors such as reserve requirement ratio cuts, interest rate cuts, and reduction of existing home loan rates, the Hong Kong stock market continued to rise, with the Hang Seng Tech Index expanding by 4% and the Hang Seng Index rising by over 3%.

In terms of ETFs, E Fund Hong Kong Bond Investment Theme ETF rose by more than 5%; Huaxia Fund Hong Kong Stock Connect Financial ETF, GF Fund Hong Kong Stock Connect Non-Bank ETF, and Da Cheng Fund Hang Seng Tech ETF rose by over 4%; Huitong Fund Hang Seng Tech ETF Fund, Huatai BaoRui Fund Hang Seng Tech ETF, GF Fund Hang Seng Tech ETF Leader, Jiashi Fund Hang Seng Tech ETF Fund, Huaxia Fund Hang Seng Tech Index ETF, Boshi Fund Hang Seng Tech Index ETF, E Fund Hang Seng Tech 30 ETF, Zhongshang Fund Hong Kong Technology 50 ETF, Morgan Fund Hang Seng Tech HKETF, Huaan Fund Hang Seng Tech ETF Index Fund, Huaxia Fund Hang Seng Internet ETF, Huaan Fund Hang Seng Internet ETF, and Nanfang Fund Hong Kong Technology ETF all rose by more than 3.5%.

Since September, Hong Kong stocks have been leading the gains, with some funds using ETFs to buy Hong Kong stocks at a low point. As of September 23, Rich Fund Hong Kong Stock Connect Internet ETF, Invesco Great Wall Fund Hong Kong Stock Technology 50 ETF, E Fund H Share ETF, Southern Fund Hang Seng Index ETF, E Fund Hang Seng Tech 30 ETF had net inflows of 1.533 billion yuan, 0.369 billion yuan, 0.172 billion yuan, 0.111 billion yuan, and 0.11 billion yuan respectively since September.

On the news front, multiple positive developments are emerging.

On September 24, Pan Gongsheng, Governor of the People's Bank of China, announced at a press conference that the reserve requirement ratio and policy rates will be lowered. The reserve requirement ratio is expected to be reduced by 0.5 percentage points, releasing long-term liquidity of 1 trillion yuan. There may be another targeted reduction of 0.25-0.5 percentage points by the end of the year.

Simultaneously, the central bank's policy rate was lowered, with the seven-day reverse repo operation rate reduced by 0.2 percentage points, guiding the Loan Prime Rate (LPR) in the loan market to move downwards synchronously. The minimum down payment ratios for first and second homes were unified, with the minimum down payment ratio for second home loans nationwide reduced from 25% to 15%.

Pan Gongsheng stated that the People's Bank of China has created a structural monetary policy tool to support the capital markets. One aspect of this is the interchangeability between securities, funds, and insurance companies, to support eligible institutions in using their own ​​bonds, stock ETFs, and CSI 300 component stocks as collateral, exchanging them with the central bank for high liquidity assets such as national bonds and central bank bills. This policy will significantly increase the funding access and stock shareholding of relevant institutions. Funds obtained by institutions through this tool can only be used for investment in the stock market.

Pan Gongsheng revealed that the initial scale of the interchangeability operation is 500 billion yuan, with the possibility of expanding in the future according to the situation. He said to Chairman Wu Qing of the China Securities Regulatory Commission, "As long as this matter is done well, we can have another 500 billion in the future, or a third 500 billion yuan. Our attitude is open."

Regarding Hong Kong stocks, Ping An Securities stated that overall, with external conditions easing, domestic policy windows opening, and AH premiums remaining high, the short-term performance of Hong Kong stocks will be relatively strong. The main driving factors include benefiting from interest rate cuts, the internet, and dividend bonuses. The impact of the Fed rate cut landing on Hong Kong stocks is more in terms of increased liquidity and favorable aspects such as the opening up of domestic policy windows. Combined with AH premiums still at high levels, Hong Kong stocks are expected to have some support in the short term. The key to further sustained upward movement for Hong Kong stocks depends on the degree of domestic policy easing and the recovery of domestic economic momentum. If domestic policies continue to support, more funds can flow into Hong Kong stocks, providing more impetus for Hong Kong stock rebound. If the easing measures are limited, Hong Kong stocks may continue to experience volatile trading. In terms of investment advice, in the short term, attention is advised on three major themes: first, growth sectors sensitive to interest rates, such as biotechnology; second, the highly elastic internet sector, which is typically the quickest to benefit from the influx of funds into Hong Kong stocks; third, dividend sectors. Due to AH's high premium, Hong Kong's dividend yield is still considerably better than A-share, but it is cautioned that high dividend sectors experiencing pullbacks under significantly overdrafted conditions is normal; there is no need to be overly concerned about the risks of crowded dividend strategies in the short term. Considering the high dividend yield, low valuation, and stable profitability characteristics of central enterprises, coupled with the new round of state-owned enterprise reforms, the value of central enterprise allocation in the Hong Kong stock market is expected to increase.