Industrial Securities(SH:601377) Zheng Quan Shi Bao·2025-12-21 18:09Core Viewpoint - The Hong Kong stock market has experienced a significant decline since the fourth quarter, with the Hang Seng Index dropping from a high of 27,381.84 points on October 2 to a low of 25,086.54 points on December 16, underperforming compared to US and A-shares [1] Group 1: Market Liquidity - The liquidity in the Hong Kong stock market has been decreasing since late October, with average daily trading volume falling to 230.7 billion HKD in November, a 16.1% decrease from October, and further declining by approximately 13% in December [1] - The reduction in southbound capital activity, foreign capital withdrawal, and ongoing IPOs are contributing factors to the low liquidity in the Hong Kong market [1][2] - As of December 12, net inflow of southbound capital was only 7.906 billion HKD for the month, significantly lower than the average monthly inflow of 125.6 billion HKD from January to November [2] Group 2: External Factors - Concerns regarding foreign capital behavior, such as profit-taking before the Christmas holiday and hedge funds shorting due to year-end uncertainties, are impacting market sentiment [2][3] - The overall trend shows that despite some net inflow through ETFs, foreign capital is exhibiting a high sell-low buy behavior, indicating risk aversion [3] Group 3: IPO Impact - The continuous increase in IPOs since May has created a liquidity "drain" effect, exacerbated by the expectation of 124.1 billion HKD in lock-up shares being released in December [3] - The market is facing pressure from both the influx of new listings and the release of previously locked shares, which could further strain liquidity [3] Group 4: Future Outlook - Short-term liquidity issues are expected to continue to constrain the Hong Kong market, affecting overall valuation recovery and making the market more susceptible to external emotional fluctuations [4] - Key signals to watch for market recovery include a clear and stable interest rate cut cycle from the Federal Reserve and a sustained recovery trend in corporate earnings [4] - Long-term prospects remain positive, with expectations that the Fed's rate cuts will enhance Hong Kong's attractiveness to global capital, particularly in sectors like raw materials, information technology, and healthcare [5] Group 5: Solutions for Liquidity Issues - Addressing the liquidity problem requires a multi-faceted approach, including shifting the focus from "liquidity speculation" to solid corporate earnings growth, improving policies and systems, and enhancing the external environment [6][7] - Specific recommendations include expanding the scope of southbound capital investments, optimizing the IPO and delisting ecosystem, and enhancing the trading environment for small-cap stocks [7][8] - Encouraging high dividend assets and attracting quality companies from Belt and Road Initiative countries for IPOs could also bolster market liquidity [8]