21世纪经济报道·2025-09-03 14:41Core Viewpoint - The article highlights the significant inflow of southbound capital into the Hong Kong stock market, surpassing 1 trillion HKD in net inflows for the year, marking a new high since the launch of the Hong Kong Stock Connect in 2014 [1][4]. Group 1: Southbound Capital Inflows - As of September 2, 2023, the net inflow of southbound capital reached approximately 1 trillion HKD, a record high since the Hong Kong Stock Connect was established [1][4]. - Since the launch of the Stock Connect on November 17, 2014, the total net inflow of southbound capital has reached 4.7 trillion HKD, indicating a consistent demand from mainland investors for Hong Kong stocks [4]. - The daily trading volume of southbound capital has increased from about 5% at the beginning of the Stock Connect to around 36% currently, providing substantial liquidity to the Hong Kong market [5]. Group 2: Reasons for Capital Inflow - The significant valuation advantage and unique investment targets in the Hong Kong market are attracting southbound capital, with notable interest in large tech stocks and new consumer sectors [6]. - High dividend yields in certain sectors and stocks are appealing to institutional investors seeking stable cash flows and returns, supported by policy tools from the central bank [6]. - The revitalization of the Hong Kong IPO market and favorable policy dividends are also contributing to the ongoing influx of southbound capital [6]. Group 3: Investment Trends - The top ten stocks with the highest net purchases by southbound capital this year include Alibaba, Tencent, and Meituan, with Alibaba alone seeing a net buy of 12.67 billion HKD [8]. - Southbound capital is primarily concentrated in sectors such as finance, technology, and biomedicine, driven by the stability of financial stocks, the growth potential of tech stocks, and the innovation capabilities of the biomedicine sector [8]. - The influx of southbound capital is enhancing the influence of mainland funds on the pricing of Hong Kong stocks and shifting the market's focus towards high-growth sectors like technology [8][9]. Group 4: Market Dynamics - The shift in the investment landscape of the Hong Kong market is evident, with southbound capital now being driven by professional institutions rather than retail investors, leading to improved research capabilities and value discovery [9][10]. - The allocation of active equity mixed funds towards Hong Kong stocks has increased, indicating a growing preference for this market among institutional investors [10]. - The potential for a significant performance phase in the Hong Kong market is anticipated if the US dollar enters a depreciation phase, coupled with expectations of interest rate cuts by the Federal Reserve [11].