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<Research>Haitong Int'l: BABA-W Receives $22B Southbound Fund Inflows Last Week; H Shrs Projected to Remain Shaky
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Haitong International recently released a Hong Kong stock strategy report stating that A-shares had experienced immense volatility last week, with the Shanghai Composite Index adding 1.5% for the week and the ChiNext Index sustaining its substantial fluctuations, rising 2.1% for the week. Hong Kong bourse reverted up, given a spike in US AI stocks, with the HSI adding 3.8% and the HSTECH soaring 5.3% last week. Following the dovish signals from Jerome Powell at the Jackson Hole meeting, a new round of gold price hikes began, with London gold soaring over 9% in combined. However, this week's US inflation data further confirmed rate cut expectations, jolting gold prices. The USD Index remained narrowly consolidated, still holding the July low; and emerging markets and Hong Kong stocks began rebounding from September 5. In the context of rate cuts being fully priced in by the market, if the Fed cuts rates by 25 bps on September 17, it may trigger a realization of benefits, exerting pressure on gold and emerging markets, while the US dollar is likely to pick up. If the interest rate is cut by 50 bps, which is more than expected, the current bullish trend is expected to persist. Last week, Hong Kong stock liquidity remained stable, with sentiment continuing to fuel momentum, and the FX trend still needs close attention, the broker suggested. Sentiment boost continues: Alibaba surged again on its self-developed chips and next-generation Qwen3 model, with risk appetite continuing to rise. Liquidity temporarily stable: HIBOR remained stable this week; on the back of rate cut expectations, the RMB appreciated moderately against the USD; however, if the USD ticks up later, the FX rate support for Hong Kong stocks may wane. Last week, after the adjustment of the AH premium index by adding 22 new groups and removing 5 groups of AH stocks, the premium plunged to about 120 and may tend to normalize. Southbound funds net inflow last week swelled to HK$60.8 billion, with BABA-W (09988.HK) continuing to receive HK$22 billion inflow, having already received HK$37 billion since September. In a nutshell, US tech stocks proliferated on 3FQ earnings reports, with the Nasdaq setting new highs, and the market fully pricing in three rate cut expectations within the year, prompting a strong rebound in A-share tech stocks, with H-shares rebounding on Alibaba and BIDU-SW (09888.HK). However, as the US tech earnings report phase ends and Sino-US trade tensions re-emerge, liquidity in A-shares and H-shares is unlikely to improve greatly in the short term, with September likely to remain volatile. Industry-wise, the broker still recommended to bottom fish large-cap blue chips, with a focus on consumer real estate, anti-involution, and non-bank financial sectors. AASTOCKS Financial News Website: www.aastocks.com |
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