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hong kong stocks closed with gains again on monday. during the national day holiday, the hang seng index rose by more than 9%. the hang seng technology index and the hang seng state-owned enterprise index rose by more than 10%. the premium rate of a shares over h shares dropped rapidly. there is almost no suspense that chinese assets will continue to rise after the holiday. .

hong kong stocks continue to surge

with the introduction of a series of economic and policy measures before the holiday, chinese assets have become the focus of global funds and are being snapped up. a-share markets were closed during the seven-day national day holiday, and hong kong stocks continued to rise. the three major stock indexes, the hang seng index, the hang seng technology index and the hang seng china enterprises index, continued to hit a two-and-a-half-year high on monday. during the national day holiday, the cumulative gains of the three major stock indexes were 9.30%, 13.36% and 10.93% respectively.

in terms of sectors, among wind hong kong's secondary industries, hong kong's diversified financial industry increased by 48.75% during the long holiday, ranking first, and semiconductors also increased by more than 40%. nine industries, including insurance and technology hardware and equipment, saw increases of more than 10%.

overseas funds are also rushing to raise chinese assets. ftse china a50 futures rose nearly 3% on monday, hitting a new high since the beginning of 2022. during the long holiday, the stock price surged by 14.32%.

the a-share csi 500 index etf listed in japan rose 89% on monday, with a cumulative increase of more than 20 times during the long holiday.

the premium rate of ah shares dropped rapidly

after the surge in hong kong stocks during the national day holiday, the latest a-share premium rate over h-shares of 149 companies listed simultaneously in hong kong has dropped significantly. wind data shows that the overall average premium rate of a shares to h shares listed simultaneously in both places on october 7 was 62.75%, a decrease of 45.04 percentage points from september 30. the hang seng stock connect ah stock premium index fell to a four-year low. the relative investment performance-price ratio of a shares has increased significantly.

the premium of some a-shares over h-shares has been completely wiped out, and a negative premium has emerged. on september 30, the price of a shares of all ah shares was higher than that of h shares. on october 7, the price of 9 h shares was higher than that of a shares. (the table below shows the stocks whose premium rate of ah shares is less than 10% and whose holiday premium rate has dropped by more than 100%)

chinese assets continue to be bullish

both a-shares and hong kong stocks are generally favored by institutions. throughout the holidays, institutional conference calls, research reports, and trading desk information appeared frequently. institutions believe that the rising momentum of china's stock market will continue, and the market's expectations for the future have become more positive. on october 4, the latest disclosure information from the hong kong stock exchange showed that jpmorgan chase purchased multiple hong kong stocks on september 27, adding hk$4.1 billion in chinese assets within one day. many hedge funds have also accelerated their allocation of chinese stocks, with the buying pace hitting a new high.

blackrock investment research said it raised its rating on chinese stocks to overweight from neutral. 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.

morgan stanley chief economist xing ziqiang said: "the national day golden week has been the busiest week in his 20-year career in international financial institutions. he has visited and communicated on the phone with no less than 3,500 overseas international investment companies in various forms. however, everyone's confidence in china's economy is gradually recovering.

hsbc recently raised its rating on mainland chinese stocks from neutral to overweight. hsbc pointed out that since the current valuation is still low and investors' positions are light, it is still a good time to participate in this rally. its valuation model suggests that mainland chinese stocks are about 15% undervalued from a fundamental perspective, and this upward trend is expected to continue as more funds flow in.

xing cheng, manager of hang seng qianhai hong kong stock connect select hybrid fund, believes that the hong kong stock market shows bottom characteristics. before rebounding, the valuation of the hang seng index has been lower than the historical average of the past 10 years for a long time. compared with major overseas stock indexes, whether it is developed markets or emerging markets, the historical valuation quantiles of most market stock indexes are above 70%, and the valuation of the hong kong stock market is obviously at a low level. at present, there are obvious marginal improvements in both liquidity and fundamentals, which provides significant support for the valuation restoration of hong kong stocks.

chen guo of citic construction investment believes that this market is a rare market that combines the three factors of upward revision of profit expectations, falling risk-free interest rates and rising risk appetite, so it is not a simple oversold rebound, but a reversal. in fact, the increase in the hong kong stock index can be considered as a bull market in a general sense. the a-share market under similar background and logic can be considered as a bull market.