Hong Kong stocks assets stage a comeback, Guotai Hong Kong Stock Connect 50 ETF (159712) surges over 1.6% in afternoon trading

Hong Kong stocks are set for a rebound. On March 16, the Hong Kong Stock Connect 50 ETF Guotai (159712) surged more than 1.6% in the afternoon.

Shenwan Hongyuan stated that Hong Kong stocks are expected to experience a structural valuation reversion. Driven by capital inflows under the calendar effect, the “January Effect” of Hong Kong stocks, prompted by fund reflows, has materialized as expected. However, since February, influenced by “HALO” trading, the shock to global liquidity caused by sharp fluctuations in gold and silver prices, and recent Middle East geopolitical conflicts, Hong Kong stocks have seen a clear decline. While diverging from other regional markets, there has also been significant internal sector divergence within Hong Kong stocks. Currently, under various narratives, valuations of growth sectors have been fully discounted, while the price-inflation trades driven by upstream resource commodity inflation have persisted for some time. The performance gap between growth and value sectors is approaching historical extremes. Overall, liquidity in Hong Kong stocks remains relatively ample, which helps stabilize the market to some extent. Under resource commodity inflation, the importance of A-H share valuation comparisons has increased, and sectors related to domestic demand, such as consumer services and internet sectors affected by “HALO” trading, also have room for valuation reversion.

The Hong Kong Stock Connect 50 ETF Guotai (159712) tracks the Hong Kong Stock Connect 50 Index (930931), which selects the 50 largest market capitalization listed companies within the Stock Connect scope as its sample, reflecting the overall performance of Hong Kong’s large-cap leading companies. The index is primarily weighted towards the financial sector, while also covering other key industries, making it highly representative of the market and characteristic of blue-chip stocks.

Risk Reminder: Mentioning individual stocks is solely for industry event analysis and does not constitute any stock recommendation or investment advice. Short-term index fluctuations are for reference only and do not predict future performance, nor do they constitute a promise or guarantee of fund performance. Views may change with market conditions and do not constitute investment advice or commitments. Different funds have varying risk and return profiles; investors should carefully read the fund’s legal documents, fully understand product features, risk levels, and distribution principles, and choose products that match their risk tolerance. Invest cautiously.

Daily Economic News

(Edited by: He Chong)

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