This year, the Hong Kong stock market continues to be weak, the Hang Seng Index fell below 16,500 points on October 13, once again refreshed since October 2011, a new low; Hang Seng Science and Technology Index also fell, has fallen to 2020 since the new low. Tracking the two indexes of a number of ETF net value have been lower during the year, but the fund share is rising. Looking ahead to the fourth quarter, a number of fund managers believe that opportunities outweigh risks in the Hong Kong stock market at the moment, waiting for a catalyst.
The more you fall, the more you buy, the more money flows into Hong Kong stock ETFs
Since the beginning of this year, Hong Kong stocks have been on a downward trend in general, with the Hang Seng Index dropping 29.11% and the Hang Seng Science & Technology Index falling 43.46%. Tracking the Hang Seng Index and Hang Seng Technology Index of a number of ETF compound unit net value growth rate has been lower, but the fund share is rising, the overall trend of "the more down the more to buy".
Specifically, a number of tracking the Hang Seng Index ETF net value fell about 20% during the year, but the overall share of the fund continued to grow, such as the Huaxia Hang Seng ETF net value fell more than 20% during the year, the share of 5.176 billion shares of the share growth, share of the rate of change of 53.78%, the year's net inflow of funds of nearly 6 billion yuan.
A number of other ETFs tracking the Hang Seng Technology Index saw their net value fall by about 37 percent during the year, while the fund's shares grew by more than two times. Such as Huaxia Hang Seng ETF net value fell 37.92% during the year, the share growth of 16.903 billion shares, the share change rate of 205.79%, the net inflow of funds during the year more than 9.3 billion yuan; relatively small scale Bosera Hang Seng Science and Technology ETF and the Dacheng Hang Seng Science and Technology ETF share change rate during the year amounted to 273.14% and 246.04%, respectively, the year's net inflow of funds for the year, respectively, 550 million and 926 million yuan.
What's especially noteworthy is that since this year, Hong Kong's pharmaceutical sector continues to be in the doldrums, but the share of related ETFs is soaring, such as the Bosera Hang Seng Healthcare ETF, whose net value fell 32.82% during the year, and its share grew by 9.302 billion, with a share change rate of 739.53%, and a yearly net inflow of more than 4.8 billion yuan.
Hong Kong stocks wait for the catalyst
For the recent Hong Kong stock market in general more sluggish performance, a number of fund managers said, the market and the fluctuations of overseas markets associated with the larger, subsequent need to pay attention to the relevant catalyst events, the current level of view, the space to rise more than the risk of falling.
Hang Seng Ex-Harbour Stock Connect Select Mixed Fund Manager Xing Cheng said, Hong Kong stocks have seen a relatively large adjustment recently, mainly due to the interest rate hike concerns and the performance of the overseas market disturbances. The strong U.S. non-farm payrolls exceeded market expectations, increasing the probability of another significant rate hike by the Federal Reserve, and the overall investment preference for Hong Kong stocks has converged, with risk aversion on the rise. Until the relevant factors improve at the margin, it is expected that the Hong Kong stock market may be in a sustained consolidation in the short term.
He said the next important point of observation is whether the Fed's attitude will turn dovish in the future after the rate hike, which will affect the trend of overseas capital flows in the fourth quarter, and in turn affect the pricing of the Hong Kong market.
Dacheng Hang Seng Technology ETF fund manager Ran Linghao recently said, since Sept. 19, the Hang Seng Technology Index has continued its downward momentum, during which the index hit a 2020 low. Correspondingly, both the Nasdaq and the A-share GEM index have also declined to some extent. He believes the upside outweighs the downside risk at current levels and advises investors to keep an eye on potential catalysts.
Country & Ocean Franklin Fund believes that due to the situation in Ukraine and the impact of the Fed's interest rate hike, Hong Kong stocks in the third quarter of the overall shock downward trend, the current valuation is at a relatively low level in history, the market is quite attractive. Looking ahead to the fourth quarter, due to the fall in commodity prices, the U.S. inflationary pressure will be weaker than the ring. Domestic measures to stabilize growth will gradually fall, real estate sales are expected to increase, taking into account the real estate industry downstream industry chain is longer, the pulling effect on the economy is more obvious; and the epidemic has been better controlled, consumption will gradually return to normal; given the current positive monetary policy and fiscal policy, the macro-economy is likely to stabilize and rebound. Guohai Franklin Fund believes that the fourth quarter corporate performance is expected to improve, the overall valuation of Hong Kong stocks is low, financial, property, automotive, Internet, pharmaceutical and real estate after the cycle of sectors have better opportunities, Hong Kong stock opportunities than risks.
Haitong Securities strategy team that Hong Kong stocks bottoming out need to wait for A shares and U.S. stocks stabilized. For A shares, the domestic economic fundamentals are the key point, of which real estate is one of the important factors. Along with the delivery of the building and stabilize growth policy landing, is expected to catalyze the A-share market once again to open a new round of rise, so that the Hong Kong stock to form a positive pulling effect.
However, the team also pointed out that when the U.S. stocks bottomed out is not yet clear, the NBER indicators show that the U.S. economy has entered a technical recession in July this year, according to the historical pattern, the U.S. stocks in the U.S. recession in the mid-to-late stage before bottoming out, and therefore is expected to bottom out in the U.S. stocks in about the fourth quarter of this year or early next year, which means that U.S. stocks on the Hong Kong stock market may still have a negative impact. As the U.S. stock market can hardly be said to have bottomed out, Hong Kong stocks may need to continue to wait for the bottom to stabilize, but considering that Hong Kong stocks are already at the bottom of the region, so there is no need to be overly pessimistic about Hong Kong stocks.
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