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author | godzilla

data support | pythagorean big data (www.gogudata.com)

during the national day golden week, a-shares are on vacation, and hong kong stocks are performing a miracle day!

without the constraints of daily limit, it is so scary!

as of the close of hong kong stocks, the three major indexes have surged in volume, with the hang seng index rising 6.2%, setting a new high since january 2023; the hang seng technology index once soared 8.53%, hitting a new high since february 2022.

the ftse china a50 index futures rose as much as 9% during the session, strongly breaking through the 15,000-point mark, and finally closed up 7.18%.

originally, investors were worried that a-shares would pull back after the holidays, but now it seems that a-shares have been completely stable after the holidays! probably continue to advance all the way!

today, hong kong stocks are soaring. the biggest driving force is not only the replenishment of funds in hong kong stocks, but also rumors that a large amount of off-market international capital has begun to pour in crazily! they began to switch to a comprehensive long position in chinese assets! get on the bus first, then pay the ticket, and just choose to run with your eyes closed!

this is a shining moment for a chinese asset to witness history!

01

great miracle day!

in a-shares, a 20% increase in one day is enough to hit the sky!

but this increase is not worth mentioning in hong kong stocks!

today, the real estate, finance, consumer, medical, and internet sectors in hong kong stocks have the largest influx of incremental off-market funds. the reasons behind this are very worthy of attention.

a total of more than 300 hong kong stocks rose by more than 20% during the session, accounting for one-tenth of all hong kong stocks. among them, 30 stocks rose by more than 100% during the session, and the increase was even more than 7 times! there are more than 100 stocks that have risen by more than 50%!

looking at the market situation in the past five days, it is even more terrifying. dozens of individual stocks have increased by more than 200%, and many of them have increased by more than 5 times. the largest one has even increased by 56 times in the past five days!

even internet technology giants are also dancing together. tencent and alibaba have surged again today by 5.75% and 4.64%, while meituan and jd.com have surged by 14.65% and 10.77%, respectively. they have all risen by more than 40% in the past five days.

the real estate chain, including mainland and hong kong developers, properties, building materials and even intermediaries, has experienced the most exaggerated growth.

especially for real estate developers, any one of them has increased by more than 50%. today, more than 10 stocks including ronshine china, greenland hong kong, zhongliang holdings, agile, shimao, and landsea green management have doubled in price, and the largest number of them is 2 an increase of more than 2 times. if you look at it in the past 10 days, it’s even more incredible.nearly 50 developers have already doubled their sales! the most has tripled!

the logic behind the soaring hong kong real estate stock market is very simple. the long-term extremely low valuation meets the strongest policy stimulus in history and the most violent "bear to bull" market in history.

now the market is beginning to strengthen expectations. with strong policies and a super bull market in the financial market allowing a large number of investors to make big money, china's real estate assets will usher in a definite high value revaluation opportunity.

prior to this, among real estate developers, without this unprecedented wave of situation reversal, quite a few companies would have been dying or even dead, even though their net asset value on their books had far exceeded their market value. some ratios are even less than 0.3 times, and of course some have serious book losses and are insolvent.

but now, after the country has introduced a series of unprecedented policy plans, all logic has changed.

including first-tier cities across the country, with the exception of a few core areas, not only have purchase restrictions been basically lifted, but down payment ratios and mortgage interest rates have also been reduced, and even the interest rates of existing mortgage loans have also been reduced, opening up policy space for an active real estate market.

the comprehensive epic rise in hong kong's stock market allowed a large number of investors to make a lot of money, which suddenly boosted the demand for buying and exchanging houses.

there are reports that since last week, new and second-hand housing transactions have become active again in some cities across the country. some sellers have taken the initiative to increase sales prices, some as high as 500,000, and some real estate prices have also increased overall.

in some sales departments, there are no customers at all, and customers come in intensively to view the houses. some customers go to the sales department overnight to buy a house and pay a deposit. for this reason, the sales department has worked overtime at night and into the early morning to process sales receipts, just like the rush to buy new homes before 2018.

it’s simply a miraculous transformation!

in particular, the smaller the market capitalization, the lower the valuation (the lower the market-to-book ratio) or even the small developers that are losing money, the more violent the rise will be! the real estate companies that have doubled in price increase list in recent days are basically this type of real estate companies.

the logic of the surge in the hong kong non-bank financial sector is probably similar.

they were all originally super-low valuations, but the super-valuation restoration brought about by the super bull market.

especially for securities firms, which are the standard bearers of the bull market, their business and performance have directly benefited from the arrival of the bull market, the large volume of market trading, financing and other businesses, and the valuation restoration has been determined to be the highest. as a result, i became drunk and dreamy.

shenwan hongyuan hong kong rose 2.06% today and 6.6 times in the past 5 days; first shanghai rose 1.4 times today and 4 times in the past 5 days. the science and technology innovation 50 etf listed on the hong kong stock exchange-southern science and technology innovation board once doubled in 50 days, and the increase once expanded to 230%.

even industry giants huatai securities, china merchants securities, gf securities, and citic construction investment all surged by 27%, 81%, 34%, and 48% respectively today. andeven so, their pes are still only a dozen times smaller, and the pbs of huatai, guangfa, bank of china, cicc, shenwan hongyuan, etc. are even less than 1 times!

haitong securities' hong kong stocks did not open today, and the current price-to-book ratio is only 0.265 times. the price of his adr in us stocks has risen from us$5 to us$13 in recent days. it is conceivable that haitong securities, which missed this bull market, will perform well when trading resumes later.

02

funds run blindfolded

get on the bus first and then pay the ticket

there are many market logics for sectors similar to the real estate chain, including various types of consumption and even some internet technologies.

according to reports, some analysts said that the sudden and unusual surge in hong kong stocks this time perfectly reflects the characteristics of foreign capital and local hong kong capital entering the market one after another due to the phobia of missing out. the return of foreign capital that had previously been significantly underweight hong kong stocks, and the "mag 7" trading of long japanese, indian and us stocks while shorting china, have completely reversed.now, funds are being withdrawn from these markets in large numbers and are being invested in the chinese market.

in recent days, fed powell's unexpected speech said that there is no need to be too hasty in cutting interest rates, suggesting that subsequent interest rate cuts may be less than expected, which triggered concerns in the u.s. stock market. although japan supports the election of a new prime minister who is hawkish on whether to raise interest rates at the same time, which has stimulated japanese stocks, but in the context of japanese stocks continuing to hit new highs in recent years, as the step of raising interest rates gets closer, the market they are also increasingly worried about the subsequent performance of japanese stocks.

as for the indian stock market, which is in chaos but miraculously hits new highs, international funds have even less confidence.

the chinese market, which has been seriously underestimated for a long time, and now has continuous release of favorable policies and rising market enthusiasm, has become the last value "depression" that global venture capital is most interested in.

according to the latest hong kong interbank offered rate (hibor) released by the hong kong association of banks, overnight interest rates have risen for eight consecutive days, hitting a one-month high, which strongly reflects the return of overseas funds to the hong kong stock market.

it is reported that many foreign investment institutions are now actively buying chinese assets, and even directly choose call options for leveraged trading without hedging the downside risk of the stock market.that led to a surge in call options trading on exchange-traded funds (etfs) that track some chinese stock market benchmarks.

and this sharp rise is also a fierce short-avoidance market. since the beginning of this year, approximately us$3.7 billion in short-selling concept stocks have all evaporated, and we are currently facing a book loss of approximately us$3.2 billion. among them, these short-selling transaction objects mainly come from alibaba, jd.com, weilai, ideal, xpeng and pinduoduo, etc. giant butthese giants are still skyrocketing at unexpected prices, which will subsequently force these short selling orders to be liquidated, which may further push up the stock price.

the latest news shows that blackrock raised its rating on chinese stocks from neutral to overweight on monday. the agency believes that given that the discount of chinese stocks relative to developed market stocks is close to record levels and there are catalysts that may stimulate investors to re-enter the market, there is still room for moderate accumulation of chinese stocks in the short term.

03

conclusion

judging from the current market sentiment, it is basically possible that companies with ultra-low valuations and high recognition at the company level will be snapped up.

what does it mean to be discernible? it probably means that the company has a certain reputation in the market or industry, and its business is industrial and understood by the market. if it has a reputation in the industry and is not involved in negative moral incidents (except real estate operating losses), it is better to be a leader.

nowadays, a large number of off-market funds are buying good assets (non-lucky assets) whose price-to-book ratio is obviously less than 1 times, preferably a few tenths of a times. they are basically buying goods like crazy.

of course, after this round of epic rises, there will definitely be many stocks, whether a-shares or hong kong stocks, that will leave the market with funds, causing a sudden sharp correction in stock prices. but now it seems that everyone is running with their eyes closed, and they are the first to get on the bus. , and then replenish the votes, i can’t care about so much else.

in this round of super bull market, where have a-shares and hong kong stocks reached? what kind of new pattern will the chinese stock market and the international stock market evolve into? no one dares to say.

because at this moment, any fundamental and technical analysis has completely lost its meaning.

but it must be a once-in-a-century super event in the history of china’s asset market, and you and i will both be witnesses!