Going south to buy 200 billion yuan in 13 days

Recently, due to crazy buying of Hong Kong stocks, “going south” has become a hot word in the market. On January 20, the southward capital bought HK $20.288 billion of Hong Kong stocks again, exceeding HK $20 billion for three consecutive days.


Why are Hong Kong stocks so popular with mainland funds? What Hong Kong stocks are mainland funds buying? Which Hong Kong stocks are worth investing in? 21 INVESTMENT link will be disassembled for you.

Going south to buy 200 billion yuan in 13 days

Over 30% of last year’s total investment in Hong Kong stocks reached 200 billion yuan in 13 days


Since the beginning of this year, southward funds have flowed into Hong Kong stocks in an explosive manner. As of January 20, the net purchase amount of southward funds in 13 trading days in 2021 has exceeded 200 billion, reaching 205.6 billion Hong Kong dollars.


What are the 200 billion Hong Kong stocks bought in 13 days? Which stocks are worth buying? (list attached)


The Hang Seng Index has also been rising all the way, rising by more than 10% so far this year, ranking first among the world’s major indexes.


In fact, in recent years, funds from the South have continued to flow into Hong Kong stocks. In particular, in 2020, the accumulated net purchase of Hong Kong stocks by southbound funds reached HK $672.1 billion, a new high since the opening of the Shanghai Shenzhen Hong Kong link. However, such an inflow situation is rare. The net purchase amount in just 13 trading days this year has exceeded 30% of last year’s, close to HK $249.3 billion in 2019.


Why does the southward capital continue to buy Hong Kong stocks?


In addition to the valuation advantage, the liquidity advantage is also the reason why Hong Kong stocks attract mainland capital to go south. In addition, in the face of more and more expensive A-share leaders, institutions have the demand to allocate Hong Kong stocks.


1. Compared with a shares, Hong Kong shares have three advantages


1) Hong Kong stock market has more valuation advantages than A-share market


In 2020, Hong Kong stocks lagged behind other markets, with the Hang Seng index down 3.4% for the whole year. At present, the valuation of Hong Kong stocks is in a global depression, and the average premium rate of a shares among ah shares is 60%. In addition, the listing of new economic stocks this year will enhance the overall valuation of Hong Kong stocks. Coupled with the promotion of the registration system of the science and technology innovation board and the growth enterprise market, the value of Hong Kong stock companies is facing a revaluation and there is a large space to make up. Therefore, compared with the more and more expensive A-share leading companies, the Hong Kong stock market with significant cost performance will continue to attract funds to the south.


2) Hong Kong stocks usually perform better than a shares driven by fundamentals


The Hong Kong stock market pays more attention to the company’s profit and performs better than the A-share market driven by the fundamentals. The company expects double-digit gains in 2021. CICC also expects Hong Kong’s Chinese shares to achieve 15-20% profit growth in 2021.


3) Hong Kong stock liquidity remains unchanged


As the epidemic situation in the mainland is gradually under control, CICC believes that the current mainland policy is gradually “turning”, while Hong Kong stocks, which are more affected by international liquidity, are still relatively loose due to the relatively lagging prevention and control of overseas epidemic.


2. Accelerating the listing of new economic targets and enhancing the structural attractiveness for a long time


Southward funds prefer the new economy. At present, the new economy sector accounts for nearly 60% of Hong Kong’s Chinese shares, and 2021 is expected to be the year for new economy companies to list in Hong Kong. More and more high-quality new economy companies or US listed Chinese concept companies choose to go to Hong Kong for listing or secondary listing to attract more mainland investors.


3. The mainland funds burst out frequently, and the source of funds is constantly going south


This year, funds burst out frequently, raising more than 200 billion yuan, and most of them can invest in Hong Kong stocks. As a shares become more and more expensive, there is a need to allocate Hong Kong stocks. In the long run, the rising demand for foreign investment in the mainland has provided sufficient support for the capital to go south. The mainland’s overseas portfolio investment only accounts for 4% of GDP, while the proportion of the United States and Japan is over 60%. There is a lot of room for upward growth.

Going south to buy 200 billion yuan in 13 days

What are the funds going south to buy? Tencent holdings is most favored


What are the 200 billion Hong Kong stocks bought in 13 days? According to the statistics of 21 INVESTMENT link (wechat ID: touzit21), as of January 20, this year, the net purchase amount of Nanxia’s funds to Tencent Holdings (0700. HK), China Mobile (0941. HK), CNOOC (0883. HK), SMIC International (0981. HK) and meituan-w (3690. HK) ranked first, with a total net purchase amount of HK $128.5 billion, accounting for more than 60% of the total net purchase amount of Nanxia’s funds.


What are the 200 billion Hong Kong stocks bought in 13 days? Which stocks are worth buying? (list attached)


Judging from the market performance, these stocks also far exceeded the 10.03% rise of the Hang Seng Index. It is estimated that over the years, the average returns of hot Hong Kong stocks with more funds going south are higher than those of the Hang Seng Index. Especially in the bull market stage, the south hot target can significantly outperform the Hang Seng Index. In 2020, when the Hang Seng Index fell by 3.4%, the hot target of southward capital gained an average increase of 66.5%, which shows the stock selection ability and pricing ability of southward capital.


What are the 200 billion Hong Kong stocks bought in 13 days? Which stocks are worth buying? (list attached)


The “clear” bull market has opened, and technology giants and value leaders benefit most


Guotai Junan International believes that Hong Kong stocks are expected to usher in an “index bull market” in 2021. Guosheng securities also said that with the accelerated inflow of funds from the south, Hong Kong stocks will continue to lead the global rise, and the “clear” bull market has opened. Following the global economic recovery and the restoration of overseas market risk preference, overseas funds will also flow back to Hong Kong stocks.


Tencent holdings, meituan, Alibaba and other technology giants, industrial and Commercial Bank of China, China Construction Bank and other value leaders will greatly benefit from the resonance inflow and scramble for funds from the South and overseas.


At the same time, the significant increase in the trading volume of Hong Kong stocks is also good for the securities companies and the stock exchange, focusing on the Hong Kong stock exchange. In addition, education, as a characteristic sector of Hong Kong stock market, is expected to have a positive performance, focusing on China Education Holdings, Huaxia audio-visual education and China Oriental Education.


What are the 200 billion Hong Kong stocks bought in 13 days? Which stocks are worth buying? (list attached)


Although the securities companies are all optimistic about Hong Kong stocks, they still need to pay attention to the risks brought by the short mechanism, such as stock price fluctuation, epidemic development exceeding expectations, macroeconomic exceeding expectations and so on.

One thought on “Going south to buy 200 billion yuan in 13 days

  • However, due to the unique snowfall climate conditions, the south has created some of the most spectacular snow in China

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