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the bullish trend of a-shares and hong kong stocks has formed a virtuous cycle.

hong kong stocks are being bought up by international capital

during the national day holiday, “because a-shares don’t want to take a holiday for the first time” was a hot search topic. indeed, during the national day, the nasdaq china golden dragon index rose 11.85% on a weekly basis, recording gains for the fourth consecutive week. hong kong stocks resumed their upward trend after a brief adjustment.

on october 4, hong kong's hang seng index closed up 2.82% at 22,736.87 points, setting a two-and-a-half-year high; the hang seng index rose 4.99% to 5,227.13 points. chinese assets have become a hot commodity, and the money-making effect is pervasive.

from the perspective of individual stocks, small-cap real estate hong kong stocks on the daychenxing developmenta sharp increase of 752.1%,core technologyan increase of over 360%,hongguang semiconductorsoared more than 285%. in addition, solomon systech rose 70%, and hua hong semiconductor and semiconductor manufacturing international also rose nearly 30%.

chinese brokerage stocks performed well, with zhongzhou securities rising by more than 29%, and shenwan hongyuan and guolian securities both rising by more than 25%.

without the assistance of funds going south, hong kong's local funds and foreign funds have become the main funds during the holidays, which is enough to prove that the underlying logic of chinese assets has changed significantly and is being recognized and sought after by global investors.

according to data disclosed by the hong kong stock exchange, jp morgan chase spent hk$895 million to increase its holdings of china merchants bank h shares on september 25, and spent hk$1.771 billion on september 26 to increase its holdings of ping an's h shares. in addition, jpmorgan chase bought china pacific insurance h shares for hk$267 million, byd h shares for hk$1.791 billion, tsingtao beer h shares for hk$242 million, and hong kong exchange h shares for hk$1.813 billion on september 27. that is to say,jpmorgan chase spent over hk$4.1 billion on the 27th to sweep away chinese assets.

this week alone, four u.s.-listed etfs related to the chinese stock market have seen $2.5 billion in inflows, with kraneshares’ kweb recording its largest ever single-day inflow on tuesday.

zhang yidong, global chief strategist of industrial securities, believes that hong kong stocks and a-shares are expected to rebound from a short squeeze to a sustained reversal of shocks, and there is a lot of room for appreciation in the future.

ah shares resonate at the same frequency

start a virtuous cycle of bull market

from a historical perspective, hong kong stocks have experienced a total of 5 bull markets since 2007. from march 2020 to february 2021, the hang seng index climbed from more than 21,000 points to more than 31,000 points, approaching its highest point in history, with a cumulative increase of 43.19%. . during this period, the overall valuation of hong kong technology stocks increased by more than 65 times. during the bull market from november 2022 to january 2023, the hang seng index rebounded by nearly 50%.

some people believe that the logic behind these two bull markets is low valuations, coupled with expectations of loose macro liquidity and a shift in various regulatory policies. today, this round of bull market also has the above-mentioned resonance logic, and the resonance intensity is unprecedentedly strong. it is not only the cycle of actual action by the federal reserve to cut interest rates, but also the huge domestic policy shift.

industry insiders said that the current rise in hong kong stocks comes from the revaluation of values, with less adjustment pressure. at the same time, the valuation of a shares has also received great support. the bullish trend of a shares and hong kong stocks has formed a virtuous circle.

yang delong, chief economist of qianhai kaiyuan fund, believes that the reason for this round of sharp rise in a shares, hong kong stocks and chinese concept stocks is first of all that after more than three years of decline, there has been a serious oversold, and these good assets have been wrongly killed. on the other hand, domestic household savings have increased by nearly 60 trillion yuan in the past four years, reaching a total of more than 140 trillion yuan. now we are faced with the problem of deposit relocation. during the national day, many investors will look for funds and transfer from bank deposits, financial management, large deposits, etc. to the capital market. they will enter the market by buying funds or directly opening an account. this is bound to further improve the a-share market after the holiday. maintaining the upward trend provides more funds.

the premium rate of ah shares is decreasing

the data shows,the latest price-to-earnings ratio (pe) of the hang seng index is 11 times, which is slightly higher than the median valuation of 10.07 times in the past 10 years and less than the risk value of 11.97 times.the latest pe of the hang seng technology index is 29 times, which is lower than the median of 36.11 times in the past 10 years and the risk value of 44.35 times.

for a shares, since the national day holiday, hong kong stocks have significantly lost about 10% of a shares, and the ftse china a50 futures index has lost 12%, indicating that investors are paying more attention to hong kong stocks with lower valuations.

for h shares, after the stock price rose sharply, the premium rate of ah shares continued to decline. we do not rule out the possibility that the premium rate of ah shares will fall further in the future, and ultimately achieve the same price for ah shares. this is the final state of the value investment stock market.

data show that as of the close of trading on september 30, the arithmetic mean of the premium rate of ah shares on the market was 107.79%, and the median was 85.6%.during the national day holiday, after hong kong stocks "rose first in order to respect", the premium rate of ah shares narrowed significantly, with the arithmetic mean falling to 81.6% and the median being 67.64%.

from the perspective of individual stocks,zhejiang shibao, hongye futures, jingcheng sharesthe latest ah share price ratios were 4.29 times, 4 times, and 3.97 times respectively, while the data were 6.69 times, 5.58 times, and 4.49 times on september 30.

for a shares, the smaller the premium of ah shares, the cheaper the a shares and the higher the cost-effectiveness of investment. judging from the latest price,wuxi apptec, china merchants bank, midea group, vanke a, huatai securitiesthe price of ah shares has been inverted. the latest price of wuxi apptec's h shares is 60.51 yuan, which has exceeded the share price of a shares of 52.36 yuan.

the premium phenomenon in the ah stock market provides investors with abundant investment clues and opportunities. from the perspective of short-term speculation, investing in companies with high premiums and favorable industry trends may result in quick returns; while for investors pursuing stability, companies with low premiums and stability are more suitable.

in any case, in a hot market, when making decisions, investors need to fully understand the fundamentals and future market expectations of the company they invest in, and at the same time formulate risk control measures to avoid losses caused by market fluctuations.