Original title: Southbound fund survey of Hong Kong stocks to buy bottom
Reported by reporter Chen Zhi As the Hong Kong stock market continued to rebound, the southbound funds that had been falling more and more bought ushered in a moment of “proud”.
Statistics released by Datayes show that before Hong Kong stocks rebounded sharply, the cumulative net inflow of southbound funds from March 14 to 15 reached 15.9 billion yuan, accounting for about 31.6% of the current net inflow of southbound funds this month.
Today, Hong Kong stocks have continued to rebound in the past three days, allowing them to reap a lot of bargain hunting returns.
“The cumulative return of some southbound funds participating in bargain hunting for Hong Kong stocks has exceeded 25% in the past three days.” On March 18, a person from the brokerage department of a brokerage revealed to reporters.
He found that these southbound funds did not pay off immediately, but instead adopted a long-term investment strategy. The reason is that they believe that in the Hong Kong stock market, the valuations of many technology stocks, real estate stocks and blue-chip stocks are still low, and as funds return to the Hong Kong stock market, they can still enjoy higher bargain hunting returns.
It is worth noting that as Hong Kong stocks and Chinese concept stocks continue to rebound and rebound, more and more large Wall Street investment banks are actively “singing more”.
Recently, Marko Kolanovic, head of global research at JPMorgan Chase, released a research report saying that investors can selectively allocate Chinese stocks with better-than-expected performance in April and May.
He pointed out that the JPMorgan research team is particularly bullish on Chinese stocks because of the recent series of stimulus measures by relevant Chinese authorities and the gradual reopening of financial markets.
“If Chinese concept stocks continue to gain increased holdings by overseas investment institutions, which in turn will drive the valuation of Hong Kong stock technology stocks to continue to rise, southbound funds will strengthen their long-term holding strategy.” The brokerage department of the brokerage department analyzed.
The reporter was informed that the rebound of Hong Kong stocks also gave domestic private equity institutions that had heavy holdings in Hong Kong stocks a chance to breathe.
A domestic private equity fund trading executive told reporters bluntly that Hong Kong stocks had been falling and falling, causing their bottom-hunting strategy to have a net worth retracement of more than 15%, causing many investors to be held accountable. Fortunately, the sharp rebound in Hong Kong stocks made their bottom-hunting strategy achieve a bumper harvest, and the corresponding net worth retracement was significantly narrowed from 15% to 4%, and investor sentiment was significantly improved.
“At present, we are actively adjusting our positions and plan to buy the blue-chip stocks of Hong Kong stocks that were wrongly killed due to the departure of overseas investment institutions to avoid risks, and strive to recover all net value retracements in the short term.” He said bluntly. Although high-net-worth individuals who subscribe to invest in Hong Kong stock private placement products have a strong risk tolerance, they also have a clear investment bottom line, that is, the investment principal is not allowed to lose money.
The more it falls, the more buy strategy “raises the eyebrows”
The above-mentioned person from the brokerage department of the brokerage said bluntly to reporters that before the sharp rebound of Hong Kong stocks on March 16, Southbound Capital has always maintained an investment strategy of “buying more as it falls”.especially on March 15thHang Seng IndexWhen it once fell to a low of 18,235 points this year, the net inflow of southbound funds that day reached 9.384 billion yuan, the largest single-day net inflow since March.
The reporter has learned from many sources that the southbound funds that actively participate in bargain hunting for Hong Kong stocks are mainly private funds and public funds. The reason is that they believe that the valuation of Hong Kong stocks has fully reflected uncertain factors such as geopolitical risks, and under the trend of sustained and steady economic growth in China, the undervaluation of some technology stocks, real estate stocks and blue-chip stocks has continued to expand.
This led to a fierce long-short game between southbound bargain hunting funds and overseas investment institutions during the first two weeks of March.
Specifically, affected by the drastic fluctuations in European and American stock markets and the sharp rise in commodities in March, investment institutions in Europe and the United States are facing higher margin pressure, which has led them to reduce their positions in Hong Kong stocks to raise funds and return to the European and American markets for “emergency”. Xiang Fund is actively undertaking the selling of overseas investment institutions.
“However, the selling scale of overseas investment institutions is still higher than the ability of southbound funds to receive orders, causing Hong Kong stocks to fall continuously.” A Hong Kong brokerage analyst said bluntly. During the period, the southbound funds did not “shrink”, but showed signs of falling and buying more, so that most of the trading days since March have maintained a net inflow of southbound funds, with a cumulative net inflow of 50.173 billion yuan.
With the sharp rebound of Hong Kong stocks in the past three days, southbound funds have finally ushered in a “harvest day”.
“Some of the southbound funds have recovered their previous dip-hunting losses, and even made a slight profit.” The aforementioned person from the brokerage department of the brokerage told reporters bluntly. In particular, under the influence of the strong profit-making effect created by the sharp recovery of Hong Kong stocks, many domestic individual investors have begun to increase their investment in Hong Kong stocks in the past two days.
In his view, the calculus of these individual investors is to wait for overseas investment institutions to return to the Hong Kong stock market to further push up the valuation of Hong Kong stocks and create higher bottom-hunting returns – especially when the relevant Chinese authorities have taken a series of measures to discourage many overseas investment institutions. After concerns, overseas funds have begun to return to the Hong Kong stock market, allowing them to see greater long-term profit opportunities.
Private equity fund performance pressure “relieved”
It is worth noting that the successful bottom-hunting of Hong Kong stocks has also effectively relieved the performance pressure of many domestic private equity institutions.
A partner of a domestic multi-strategy private equity fund revealed to reporters that since February, their investment committee believes that whether from PE valuation or PB valuation analysis, the valuation of Hong Kong stocks is below the historical average, and with the domestic real estate industry policy Marginal relaxation, monetary policy continues to loosen, Hong Kong stocks are expected to usher in a rebound in valuation.
“Since March, we have been buying the bottom to increase our holdings of Hong Kong stocks, but due to the continuous decline of Hong Kong stocks, the net value of our various private equity product portfolios has dropped by more than 20%.” He recalled that many high-net-worth clients were quite dissatisfied with this at that time. , directly request early redemption.
“During the period, we also took some pacification measures, such as no longer charging management fees before the net value of the product rose to 1 yuan; and additionally subscribed for private equity products’ own funds, etc.” The multi-strategy private equity fund partner pointed out. However, the Investment Committee has not agreed to lighten up positions in Hong Kong stocks and stop losses. Fortunately, with the sharp recovery of Hong Kong stocks in the past three days, the net value decline of many of their private placement products has narrowed from 20% to 5%, and investors no longer require “early redemption”.
The reporter has learned from many sources that there are not a few domestic private equity funds that take advantage of bargain-hunting Hong Kong stocks to ease performance pressure.
A person in charge of a domestic macro strategy private equity fund revealed to reporters that after the sharp recovery of Hong Kong stocks in the past three days, their Hong Kong stock investment portfolio has basically recovered the previous net value decline. This is mainly due to the fact that they made a substantial adjustment during the bargain hunting period, focusing on the allocation of technology stocks and some real estate stocks that were killed by mistake.
“At present, we plan to increase the allocation of Hong Kong blue-chip stocks with high dividend yields. Because these stocks are still undervalued.” He told reporters. To his surprise, with the sharp rebound in Hong Kong stocks creating a high profit-making effect, the number of high-net-worth clients willing to subscribe for private equity investment products in Hong Kong stocks has increased significantly in the past two days.
A director of the investment research department of a large domestic private equity fund told reporters bluntly that they are also discussing the feasibility of additional allocation of Hong Kong stocks. The reason is that the escalation of geopolitical risks may cause global commodity prices to continue to rise, but the stock prices of some resource-related listed companies in Hong Kong have not yet reflected the rising trend of commodity prices, and there are some specific investment opportunities. In addition, the current dynamic valuation of the Hang Seng Index is less than 10 times, which is lower than the average since 2015, which makes Hong Kong stocks present a high investment safety.
“This low valuation feature is particularly important for us to obtain stable investment returns in the volatile financial market.” He pointed out.
(Author: Chen Zhi Editor: Zhang Xing)
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