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good things come one after another!

hong kong's new "policy address" will be released on october 16. the democratic alliance for the betterment of hong kong published a proposal on "enhancing hong kong's status as a new stock listing and financing center", which put forward six major suggestions, including lowering the financial requirements for listing, setting two-way indicators for approval and response, introducing a "testing water temperature communication" mechanism, and lowering stock stamp duty , hong kong investment company's funds subscribe for high-quality new shares and discuss optimizing the regulatory structure and policies. among them, the issue of lowering stock stamp taxes has attracted particular attention.

today, the hong kong stock market experienced a relatively large adjustment, but there was still a decent rebound in the afternoon. so, with these positive blessings, will the hong kong stock market continue to rebound? many institutions and analysts believe that a reversal in hong kong stocks may be occurring.

hot discussion on stock stamp tax

recently, stamp duty on hong kong stock transactions has been mentioned frequently. today, news from asdaq finance stated that the democratic alliance for the betterment of hong kong issued a proposal to "enhance hong kong's status as a new stock listing and financing center", which put forward six major suggestions, including lowering financial requirements for listings, setting two-way indicators for approval responses, introducing a "testing water temperature communication" mechanism, reducing stock stamp duties, subscribing to high-quality new shares for funds under hong kong investment companies, and exploring the optimization of regulatory structures and policies. the goal of the measures is to improve hong kong's listing and financing system and attract more companies to choose to list in hong kong, so as to maintain hong kong's status as an international fund-raising hub and international financial center.

on september 23, acca (association of chartered certified accountants) hong kong chapter proposed a total of 11 recommendations in three major directions for the "policy address" to be released by the hong kong chief executive, aiming to consolidate hong kong's status as a financial and innovation center and promote hong kong to become a green city. , and boost hong kong’s economic confidence. the 11 recommendations include reducing stamp duty on the stock market, temporarily reducing or waiving stamp duty on first-time home buyers, increasing tax exemptions for hiring foreign domestic helpers or caregivers, and extending tax deductions for eligible research and development activities to the guangdong-hong kong-macao greater bay area.

on september 27, pricewaterhousecoopers, one of the big four accounting firms, submitted a proposal for the 2024 annual policy address to the hong kong government, describing it as urgent for hong kong to cultivate unique local new productive forces, including rebuilding capital market confidence, attracting investment and talent, and promoting digital recommendations put forward policy recommendations in three major directions. among capital market-related proposals, pricewaterhousecoopers proposed that the hong kong government reduce stamp duty on stock buyers, extend trading hours, and establish an over-the-counter (otc) alternative financing platform for small and medium-sized enterprises.

on september 2, the hong kong securities and futures association put forward suggestions for this year's policy address, believing that stock stamp duties can be further reduced or even abolished, and low transaction costs can be used as an inducement to attract more external funds to flow into the hong kong stock market.

on november 15 last year, the hong kong sar legislative council passed the stamp duty (amendment) (transfer of securities) bill 2023 on the third reading, lowering the stamp duty rate payable for buying and selling stocks from the current 0.13% to 0.1% to implement the sar chief executive’s li jiachao proposed measures to enhance the competitiveness of the stock market in his 2023 policy address.

how to go about hong kong stocks?

in early trading today, the hong kong stock market once plunged, with hang seng technology falling by more than 7% at its peak. but in the afternoon, the market began to rebound and the decline narrowed significantly. hang seng technology's decline once narrowed to about 2%, and the hang seng index's decline also narrowed to around 1%. what deserves more attention is the trend of a50. the index was once impacted by hong kong stocks today, but as hong kong stocks rebounded, the index soared rapidly, with an increase of more than 1%.

zhang yidong, global chief strategist of industrial securities, said that the shock in the hong kong stock market has just verified the reversal logic, rather than a short-lived rebound. in october, hong kong stocks and a-shares are expected to turn from the recent short-squeeze rebound into a more sustained shock reversal.

morgan stanley said chinese stocks could rise a further 10% to 15% if the chinese government announces more support measures in the coming weeks. expectations of further fiscal expansion are back on the table, causing investors to view china through an inflationary lens for the first time in a long time.

standard chartered said that the current valuation of the hang seng index is still reasonable and investor positions are still low. the bank is cautiously optimistic about the recent market momentum or sustainability.

the final height and trend of hong kong stocks may still depend on a shares. today, hsbc research upgraded the mainland market rating from neutral to overweight. it has launched a series of bold stimulus measures, marking a turning point in the market and may provide a window to outperform the market. however, the current mainland market valuation is still attractive it’s not too late to enter the market.

hsbc research believes that it is not important at this time whether these policy measures can ultimately solve the structural resistance and real estate problems. the key is that china has formulated policies that will play an important catalytic role in the undervalued capital market.

after the ftse china index rebounded 28% in the past two weeks, some investors are asking if the ship has sailed? hsbc research believes that an analysis of 30 historical rebounds of more than 10% in the ftse china index since 2005 shows that the average rebound lasted 76 trading days, with an average increase of 38%, and at least a quarter of the rebounds increased by close to 60%. valuations in chinese stocks therefore remain attractive, with a discount of 18% compared to emerging markets and a historical discount of 5%.

the hsbc valuation model shows that based on fundamental factors, the a-share market is still undervalued by 15%. investors' current weighting on the a-share market is 230 basis points lower, which is 10% lower than historical levels, indicating that the market has the potential for inflows. from an industry and factor perspective, hsbc prefers growth industries, including film and television and information technology, beneficiaries of state-owned enterprise reforms such as telecommunications, and high dividend yield stocks.