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since china launched its "policy gift package", a large number of a-shares have reached their daily limit, and southbound funds have poured in, driving hong kong stocks to soar. yesterday, hong kong's hang seng index closed up 6.2%, and the hang seng technology index rose 8.53%.

account openings and trading volumes surged, and young investors poured into the stock market.brokerages are so busy that they “can’t take any more days off and have no food to eat.”

today, the hong kong stock market experienced a relatively large adjustment, but in the afternoon, the hong kong stock market rebounded in a v-shape and recovered most of its losses. as of the close, the hang seng index closed down 1.47%, ending its sixth consecutive rise.

will the hong kong stock market continue to rebound?many institutions and analysts believe that a reversal in hong kong stocks may be occurring.

in addition, during the a-share market close,who is entering the hong kong stock market? which sectors do incremental funds prefer?

how will hong kong stocks go after the shock?

analysts and traders are increasingly confident that the bull market will continue.

zhang yidong, global chief strategist of industrial securities, said,the hong kong stock market's shock 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.

zhou weiming, head of asia pacific capital markets department of citigroup, pointed out that the federal reserve’s interest rate cut has led to the fall of hong kong interest rates, coupled with the series of large-scale rescue measures launched by mainland china, it can be regarded as the right time and the right place. if these factors can promote the continued recovery of the mainland economy, it will be drive the market to rebound,it is expected that hong kong's new stock (ipo) market will return to the bull market three or four years ago next year.

sat duhra, fund manager of janus henderson group plc., said at a conference yesterday that global investor interest in markets such as south korea and india is waning,"china is the only focus right now."

jason lui, a strategist at bnp paribas, believes that some foreign investors are reducing their positions in japan and reallocating funds back to china.

eric yee, investment manager at atlantis investment management company in singapore, said that in order to buy china, they are reducing long positions in other parts of asia.

the final height and trend of hong kong stocks may still depend on a shares.

chen guo, chief strategist at citic securities, said,this round of market conditions is "confidence revaluation bull", and we are still optimistic about the performance of a-shares after the long holiday. the market is currently in the initial stage of a bull market.

chen guo emphasized that even if there is a certain degree of correction after the holiday, or even if the market continues to consolidate for a period of time after the correction, it is not the end of the bull market.

account opening and trading volume surged, hong kong securities firms were crazy busy

the market is booming one after another, and stockbrokers in hong kong are experiencing the busiest period of their careers.

according to hong kong media reports, the systems of some securities firms and banks have become overloaded, making it difficult for customers to log in to mobile applications.

edmund hui, ceo of phillip securities, one of the largest local brokerages in hong kong, said that the company's account opening business has experienced huge growth, and many customer service employees have canceled their holidays and are on call 24 hours a day to cope with the unprecedented surge in customer inquiries.

other trading platforms are facing the same situation. as a very popular trading platform for hong kong retail investors, tiger brokers saw a 73.4% increase in the number of account openings last week, and the number of active users of its mobile app also increased by 10% year-on-year.

futu holdings, one of hong kong's largest online brokerages, said that the number of account opening inquiries last week was 40% higher than usual, the stock trading volume on futu's online platform increased by 95% from the previous week, and the number of investors increased by 60%. "last week's buying boom was mainly concentrated on hong kong stocks and a-shares traded through shanghai-hong kong stock connect and shenzhen-hong kong stock connect," its spokesman said.

kenny wen, head of investment strategy at kgi asia ltd., said:

“it has been a very busy day with continued inquiries from customers.i don't have time for lunch.we're likely to remain busy for another month or two as positive market sentiment is likely to keep volumes high. "

young investors flock to the stock market

on wednesday, october 2, hong kong stock market trading volume reached hk$434 billion (us$55.9 billion), with stocks hitting multi-year highs. many young investors are worried about missing out on this market trend and have opened accounts on online trading platforms.

as mentioned above, the number of accounts opened by tiger brokers last week increased by 73.4% compared with the previous week, and about 80% of the new accounts were opened by young people under the age of 30.

due to the surge in users, the online trading platform systems of banks and securities firms were once overloaded, causing some novice investors who wanted to enter the market to be unable to open accounts smoothly.

some investors did not want to miss the opportunity, so they gave up online operations and turned to open stock trading accounts offline. with help from staff, some people find this way to be faster. tom chan pak-lam, honorary president of the hong kong securities association, said:

“recently, it’s really interesting that many young investors in their 20s and 30s have gone to some of the oldest brokerage branches in hong kong to open new stock trading accounts. usually, these young investors tend to open accounts online, but now, due to some online platforms it’s too crowded, so some young people choose to open stock accounts offline.”

tom chan pak-lam also pointed out that the market's continued rebound and record trading volume have stimulated the interest of young people, and it is expected that more investors will open stock accounts for trading. at the same time, this has also attracted previously inactive investors. investors returned to the market.

who is buying hong kong stocks and what are they buying?

who is entering the hong kong stock market during the "absence" of southbound funds?

huafu securities stated,in september, international intermediary funds in the hong kong stock market turned to net inflows again after continuous outflows for several consecutive months, becoming an important incremental fund in the market.since mid-to-late september, the net inflow of funds from international intermediaries has reached hk$39.6 billion, exceeding the net inflow of southbound funds of hk$20.5 billion.

huatai securities also pointed out thatthe return of foreign investment allocations (especially passive index-based foreign investment institutions) has played an important financial role.

which sectors do incremental funds prefer?

huafu securities pointed out,in the hong kong stock market, international intermediary shareholdings favor the consumer discretionary and information technology sectors., which is also an important component of the hang seng technology index. from this perspective, the rapid return of international intermediary funds since mid-to-late september is an important factor in the dominance of the hang seng technology index. as of september 30, in the hong kong stock market, the consumer discretionary industry held by international intermediaries accounted for 30%, and information technology accounted for 25%, which is much higher than other industries.

how much additional capital is likely to enter the market in the future?

huatai securities estimates,in the future, incremental funds for hong kong stocks may come from the covering effect of foreign capital and the liquidation effect of short positions:

first, the global foreign investment replenishment effect; as of the end of the second quarter, chinese stocks accounted for 1.3% of the equity portfolios of the world's top 20 asset management institutions (including mutual funds/hedge funds/trusts, etc.), which is higher than msci acwi china the benchmark weight is underweighted by 1.9pct; if expectations improve, foreign capital's allocation to china will return to the first quarter level (underweighted by 1.7pct), which may bring about a net inflow of approximately us$17 billion from leading asset management institutions; if it returns to 2018 -2020 central level (0.5pct underweight) may bring about a net inflow of approximately us$100 billion.

second, the effect of liquidation of existing short positions; although the proportion of short transactions in hong kong stocks has been at a historically low level since september, the number of open short-sold shares in the market has not yet dropped significantly, and the power of liquidation of existing short positions has not yet been fully released.

huafu securities also believes that the recent outstanding performance of chinese assets represented by hong kong stocks is the result of multiple factors. on the one hand, various favorable domestic policies have been frequently introduced, which has greatly boosted market confidence; on the other hand, the overseas federal reserve cut interest rates in september. the global liquidity environment is becoming looser at the margin, and in the early stages of the fed's interest rate cuts, global equity markets tend to benefit from the denominator-side logic and generally perform better.

therefore, taken together, the current hong kong stock market is still on its way, and there is still room for growth in the future. structurally, if international intermediary funds continue to flow back into the hong kong stock market, the growth sector represented by hang seng technology is expected to continue to dominate.