Zhong Guo Zheng Quan Bao·2025-11-04 20:17Core Insights - Southbound capital has significantly increased its holdings in the Hong Kong stock market, marking it as the largest source of incremental funds this year, with a cumulative net inflow exceeding 1.27 trillion HKD, a historical high [1][4] - The Hong Kong stock market has performed well this year, with the Hang Seng Index and Hang Seng Tech Index rising over 29% and 30% respectively as of November 4 [1][6] - Despite recent market fluctuations, analysts believe that the Hong Kong market is primarily driven by liquidity, with potential for substantial upward movement in the medium to long term [1][7] Southbound Capital Inflows - As of November 4, 2023, southbound capital has recorded a cumulative net inflow of 12,753.21 billion HKD this year, more than double the amount from the same period in 2024, with a single-day record inflow of 358.76 billion HKD on August 15 [1][4] - In 198 trading days this year, there were net inflow days on 166 occasions, accounting for over 80% [1] - Monthly net inflows have consistently exceeded 110 billion HKD in several months, including January through April, July, August, and September [1] Holdings and Sector Preferences - As of November 3, 2023, southbound capital held 5,525.19 billion shares, an increase of 867.34 billion shares since the beginning of 2025, with a market value of 6.29 trillion HKD, up 2.71 trillion HKD [2] - The financial, information technology, and consumer discretionary sectors have the highest holdings, valued at 15,135.25 billion HKD, 13,086.04 billion HKD, and 8,918.34 billion HKD respectively [2] - Major stock holdings include Tencent Holdings over 650 billion HKD, Alibaba-W over 360 billion HKD, and several banks and energy companies exceeding 200 billion HKD [2] Recent Buying Trends - The most significant increases in holdings this year have been in China Construction Bank, Bank of China, and other major banks, with increases of 68.96 billion shares, 52.02 billion shares, and 50.27 billion shares respectively [3] - In the past month, the financial, energy, and communication services sectors saw the highest net buying amounts, with 255.73 billion HKD, 112.20 billion HKD, and 95.67 billion HKD respectively [4] Company Buybacks - As of November 3, 2023, Hong Kong-listed companies have repurchased over 1,460 billion HKD worth of shares, with 239 companies participating in buybacks this year [5] - Tencent Holdings leads in buyback scale with 609.65 billion HKD, followed by HSBC and AIA with 302.57 billion HKD and 176.93 billion HKD respectively [5] - The buyback trend is particularly strong in the technology and financial sectors, with notable increases in consumer companies as well [5] Market Performance and Outlook - The Hong Kong stock market has shown strong performance this year, with all industry sectors experiencing gains, particularly materials, healthcare, and information technology [6] - The Hang Seng Index's rolling P/E ratio has increased from 8.96 to 11.89, indicating a potential for valuation recovery [6] - Analysts suggest that the market may continue to experience fluctuations in the short term but has significant upward potential in the medium to long term due to favorable liquidity conditions and ongoing capital inflows [7]