我们在上周南向资金依然亢奋的情况下，又重点提示（3月18日《南向流入还有多少空间？》），这样的亢奋中有相当一部分是趋势和个人投资者，近5年新参与港股的投资者要重温下此前几轮抢夺定价权时发生了什么。南向在面对可以借券的卖空和供给无限的配股是不存在“绝对定价权”的，近期配股就激增。
Source: Kevin strategy research editor.
Author: Liu Gang.
According to China International Capital Corporation, once expected valuations are fully accounted for and before new catalysts emerge, funding discrepancies will surely increase. To respond to this market, which continues to rise from the bottom yet is prone to excessive enthusiasm, the best strategy is to "actively intervene during downturns and take moderate profits during times of excitement"; if one is unwilling to reduce positions, then balance in terms of style is advisable.
In our report "Can Hong Kong stocks still be bought?" on March 10 two weeks ago, it was pointed out that the current valuation (whether for the Hang Seng Index with a 40% inclusion of tech stocks or the 60% AH premium portion viewed purely through the lens of dividends) is relatively reasonable, with sentiment fully accounted for. Therefore, the suggestion is: 1) The cost-effectiveness of chasing at this position is low; 2) If unwilling to reduce positions, some portions can be moderately shifted to dividends, and then switched back after a correction.
Last week, while southbound funds were still exuberant, we highlighted again (on March 18 in "How much more space do southbound inflows have?") that a considerable part of this exuberance comes from trends and individual investors, and those who have newly participated in Hong Kong stocks in the past five years should revisit what occurred during previous rounds of price contention. Southbound, when faced with short selling through borrowed shares and unlimited supply of placements, does not hold "absolute pricing power," and recently there has been a surge in placements.
In fact, clients familiar with our views know we have maintained the Hang Seng Index target at 23,000-24,000, optimistically at 25,000. Looking back, for more than a month, it has essentially been a repeated game within this Range.
Actually, it is inherently difficult to precisely specify points; short-term fund games can show fluctuations of 3-5 points within a single day, setting new highs. However, one thing is certain: once expected valuations are sufficiently incorporated, and before new catalysts emerge, the divergence in funds will certainly increase.
In fact, the most important factors are cost and positions. Everyone’s assumptions and expectations for the future can vary, so it ultimately comes down to using different costs to gamble on future expectations they believe in. If the cost is very low, short-term fluctuations are completely negligible and can be endured; however, if the cost has just been added in the past month, it becomes quite awkward. Positions operate in a similar manner.
Therefore, in response to this market that is continuously rising from the bottom yet easily prone to overexuberance, the best strategy is what we have previously mentioned: "actively engage during downturns and take moderate profits during exuberance." If unwilling to reduce positions, then aim for balance in style. However, chasing tends to be painful and can easily lead to buying at the top.
Editor/jayden
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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