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arts丨zhao jian, founding president of xijing research institute

during the national day holiday, hong kong only had one day off and spent the remaining three days "dancing alone". however, hundreds of millions of chinese stock investors have been staring at this open-ended venue with envy, excitement and anxiety. therefore, under such a background of time and space, hong kong stocks have become the "futures" of a-shares, inevitably leading the pricing of a-shares after the holiday.

of course, it is h's substantial "premium" to a. for example, a leading real estate company that i had a heavy position in tripled its value within a week after the stock market started. it continued to surge by about 70% in the two days after the national day, with a slight adjustment on the third day. during the surge in the hong kong stock market, the previous practice of h discounting a was changed, and a valuation inversion began to occur. h was once 10% higher than a. this may be the first time in history. there are many such companies. after sorting through them, i found that they are all in the real estate, education and training, medical, gaming and other industries that have been severely valued to the ankles due to strict policy control in the past. this means that what international investors are doing this time is not only the shift in monetary policy, but also the relaxation of various "contractionary policies."

mad cow has started to remind you not to hesitate

since hong kong stocks are a market where international capital flows freely, they are more sensitive to u.s. dollar interest rate cuts and will be priced more fully. as the global monetary easing cycle begins, there will be a new round of tidal migration of international capital, with the main route being from developed countries to emerging countries. similar to every time there is a large-scale water release, the biggest gains are in growth stocks (emerging countries). when the water release ends, the funds flow back to the blue-chip dividend sector (developed countries). the hong kong market has become the beneficiary of this new wave of global capital, "catching the rain" for the entire chinese assets. according to statistics,american financialinstitutions have reallocated chinese assets in the past week, and the average percentage has increased by more than ten percentage points, especiallyhedge funds, the rate of improvement can be described as soaring.

in this way, the logic is very simple, and the post-holiday a-share strategy can also be operated in a fool's style. because investors in hong kong stocks help a-share investors choose the target and price it in advance. it can be said that due to the absence of national day, the pricing space of a-shares has been occupied by hong kong stocks. hong kong stocks have actually become a-share futures, seizing the pricing power of china’s equity assets. after the a-share market opens after the holidays, investors will definitely rush to grab the ah stocks that have risen sharply on the hong kong stock exchange. it is likely that tens of thousands of people will rush to raise funds again. the hong kong stock connect concept sector has reached its daily limit until the pricing of a and h shares is revalued to a new equilibrium position.

this year, the hong kong stock market will change its image as a model bear market in the past three years and become one of the most dazzling markets in the year of the dragon.hong kong international financial centerstatus will be further restored based on the so-called "ruins theory". the particularity of the hong kong market is that it is a hub linking domestic and foreign capital funds. to a large extent, it is priced in the relationship between china and the world, especially the relationship between china and the united states. when china fully integrates into the world, the hong kong market can be said to be "loved by grandma (mainland) and loved by grandma (overseas)", and chinese assets are doubly sought after. on the contrary, when anti-globalization, interest rate hikes between china and the us dollar, the "de-chinaization" of the western world, and china's strict supervision and high-quality development transformation, it is also "grandma dislikes it, grandma abandons it", hong kong stocks will also be greatly discounted, and pb will be low at 0.5, assets with even lower levels abound. it is indeed a bit like a "garbage dump" for discarding chinese assets.

china is indeed experiencing pain in its economic, social and political transformation, but international investors have indeed seriously underestimated chinese assets. investment needs to look at issues from the perspective of development and change. situations are stronger than people, and situations are stronger than policies. if you can't go any further, you will turn back if you hit the south wall. after the third plenary session of the 20th central committee of the communist party of china, china's development path has begun to correct itself. however, there was a policy window of nearly two months during the preparation process, which caused a shares to fall sharply again, almost falling to a new low for the year again. just at the time of crisis, the great reversal policy came out of nowhere, and the risk-clearing policy was released overnight. the degree of haste was similar to that after masks were released, everyone rushed to grab fever medicine but could not get it. a few days ago, the a-share market was in a rush for funds, and selling orders were scarce at the margins. only the national team sold bits and pieces, but it couldn't satisfy everyone's appetite. in the end, the system was paralyzed and the market reached its daily limit.

therefore, we have to look at the underlying logic of this surge in hong kong stocks: whether it is just long valuation restoration, long a comprehensive shift in past policies, or more thoroughly long china’s development path, which was proposed at the third plenary session of the 20th central committee of the communist party of china. "further comprehensively deepen reforms." for investors, they may not need to think so far or so much. the logic is gradually emerging day by day. what needs to be done today is to seize this once-in-a-lifetime opportunity for a major valuation change. of course, there are many risks in the future. for example, the huge market fluctuations caused by the mad cow market may worry policymakers, the u.s. dollar's subsequent interest rate cut may change, the war in the middle east may expand, the u.s. election will further disrupt sino-u.s. relations, etc. . therefore, even in a bull market, you still need to tread carefully and carefully to protect your positions and positions. however, it is certain that a-shares will usher in a new round of surge after the holiday, because its h-share "futures" have already led the pricing.