From last year to this year, Hong Kong suffered negative blows such as political turmoil and the spread of the epidemic. The stock market has been in a downturn throughout the year, in sharp contrast with the skyrocketing global and Asian surges. However, since the beginning of this year, the continuous inflow of capital from mainland China has made Hong Kong stocks seem to have begun a bull market visible to the naked eye.
The start of this wave of market is undoubtedly the southbound funds from mainland China, and the degree of crazy inflow is surprising.
Net purchases in more than half a month have been nearly HK$200 billion
Data show that as of the close of January 19, the total net purchases in just over half a month this year have reached HK$185.3 billion, which has exceeded one-fourth of last year’s net purchases. It reached a peak today, reaching 26.6 billion Hong Kong dollars, setting a new record for net purchases in a single day since the launch of Southbound Stock Connect.
If today is added, since the opening of Southbound Stock Connect, the net inflow of a single day has exceeded 10 billion Hong Kong dollars for a total of 19 days, of which 12 days occurred this year, which is equivalent to writing history every day, and investors are excited to chase the rise.
Black name single stock favored
Judging from the stocks with the most purchases, the five companies blacklisted by Trump are most favored by Chinese investors. According to Flush statistics, as of last weekend, China Telecom (0728-HK) increased its holdings by 1.946 billion shares, followed by China National Offshore Oil (0883-HK), China Unicom (0762-HK), China Mobile (0941-HK) and SMIC (0981-HK) were added to the stocks of 1.77 billion shares, 1.075 billion shares, 786 million shares and 451 million shares by the southward capital respectively.
This wave of mainland funds rushing into Hong Kong stocks did not start this year, but mainly appeared in the fourth quarter of last year. During the quarter, the amount of funds purchased by the south to buy Hong Kong stocks exceeded 900 billion Hong Kong dollars, and the net purchases exceeded 200 billion Hong Kong dollars. Then this year, it “increased” and upgraded to frantic grabbing.
Under the capital rush, the most direct change appears in the transaction amount. On January 18, the total turnover of Hong Kong stocks was 224.3 billion Hong Kong dollars, and the total trading volume of southward funds was as high as 76 billion Hong Kong dollars, accounting for about one-third. Today’s record-breaking amount has made Hong Kong stock trading a new high since 2015.
The premium of AH shares is greatly reduced
There are signs that public funds may be an important force among them. Statistics show that among the new funds issued in January this year, more than half of the products included Hong Kong stocks. As of January 18, a total of 1,638 public offering funds invested in Hong Kong stocks through the Shanghai-Shenzhen-Hong Kong Stock Connect.
The premium of AH shares is an important reason for the pursuit of funds. As Hong Kong stocks are catching up, the spread between the two stock markets has also begun to shrink. The Hang Seng Shanghai-Shenzhen-Hong Kong Stock Connect AH share premium index shows that A shares are currently at a 34% premium over H shares. In contrast, the premium reached 45% more than a month ago.
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