Group 1 - The Hang Seng Innovation Drug Index and the Hang Seng Hong Kong Stock Connect Innovation Drug Index have undergone a composition adjustment effective from August 11 [1] - The new calculation method excludes companies primarily engaged in the CXO industry, including Contract Research Organizations (CRO), Contract Manufacturing Organizations (CMO), and Contract Development and Manufacturing Organizations (CDMO) [1] - The adjustment introduces a requirement for Southbound trading connectivity, meaning only stocks that meet the Hong Kong Stock Connect criteria can be included, enhancing investment convenience [1] Group 2 - The Hang Seng Innovation Drug Index will maintain a fixed number of 40 constituent stocks, with eligible securities selected based on their relevance to innovative drug business [1] - The adjustment reflects the latest development trends in the Hong Kong innovative drug sector, providing investors with a more precise market benchmark [1] - The changes also indicate a trend of deeper integration between the capital markets of the two regions as the connectivity mechanism continues to improve [1]

Core Insights - The People's Bank of China announced new measures to enhance the Bond Connect program, allowing foreign institutions to use Northbound Bond Connect for margin payments in swap transactions, which will increase the application of RMB bonds as offshore collateral [1][3] - The Bond Connect program has significantly increased the daily trading volume of Northbound transactions, from an average of 1.5 billion RMB in its first month to approximately 46.6 billion RMB in May 2023, representing a growth of over 30 times [1][3] - The Chinese bond market is now the second largest globally, yet the proportion of foreign investment remains relatively low, indicating substantial room for growth [2][3] Industry Developments - The Bond Connect has become a crucial link between domestic and international bond markets, facilitating foreign capital inflow into China's financial markets [3] - As of May 2024, over 1,100 institutions from more than 70 countries and regions have entered the Chinese interbank bond market, with foreign institutions holding a total of 4.3 trillion RMB in bonds, reflecting an average annual growth rate of nearly 20% over the past five years [3] - The Northbound Swap Connect has attracted 61 foreign institutions, completing over 4,300 transactions with a total nominal principal of approximately 2.2 trillion RMB, showcasing significant growth in trading volume [3]

Summary of Key Points Core Viewpoint - Southbound funds have become significant participants in the Hong Kong stock market, holding 18.24% of the total shares of Hong Kong Stock Connect stocks, with a total market value of 55,994.41 billion HKD [1]. Group 1: Southbound Fund Holdings - As of July 29, southbound funds held a total of 4,563.87 million shares in Hong Kong Stock Connect stocks, representing 18.24% of the total share capital [1]. - The market value of shares held by southbound funds accounts for 13.77% of the total market capitalization of the stocks [1]. - There are 222 stocks where southbound funds hold over 20% of the total share capital, while 135 stocks have a holding ratio between 10% and 20% [1]. Group 2: Industry Distribution - The stocks with over 20% holdings by southbound funds are primarily concentrated in the healthcare, industrial, and financial sectors, with 43, 35, and 32 stocks respectively [2]. - Among the stocks with the highest southbound fund holdings, China Telecom leads with 74.69%, followed by Green Power Environmental and China Shenhua with 69.97% and 66.91% respectively [2]. Group 3: Characteristics of High Holdings - A majority of the stocks with high southbound fund holdings are AH concept stocks, with 125 out of 222 stocks (56.31%) having over 20% holdings being AH shares [1]. - The distribution of holdings shows that 14.81% of stocks with 10% to 20% holdings are also AH shares [1].

Group 1 - The core viewpoint of the article highlights the significant growth of Hong Kong's asset and wealth management industry, with total assets surpassing HKD 35 trillion and a net inflow of funds increasing by 81% in 2024 [1][2] - Chinese institutions have shown remarkable performance, with their management scale growing by 15% to HKD 3.09 trillion and net fund inflows surging by 68%, outperforming the industry average for five consecutive years [1][6][8] - The growth of Hong Kong's asset management sector is attributed to three main drivers: market performance, global capital rebalancing, and policy optimization [2][3] Group 2 - The report indicates that as of the end of 2024, the total value of managed assets in Hong Kong increased by 13% year-on-year, reaching HKD 35.14 trillion, with significant contributions from asset management and private banking sectors [2][4] - The rise in asset management scale is linked to the performance of the Hang Seng Index, which rose by 18% over the past year, and the Chinese dollar bond index, which increased by 12% [2][3] - The implementation of the "Interconnection 2.0" policy has facilitated a 2.4-fold increase in net inflows from southbound funds, accounting for 36% of the growth in retail asset management in Hong Kong [2][3] Group 3 - Chinese institutions have effectively leveraged their understanding of domestic investors' needs and preferences, leading to a competitive edge in the market [6][7] - The report notes that non-equity asset allocation has increased, with 59% of managed assets invested in non-stock categories, driven by proactive strategies and policy benefits [9][10] - The future growth of Chinese institutions is expected to be fueled by the optimization of interconnection mechanisms, continuous innovation, and advancements in technology [11][12]

Core Viewpoint - The article highlights the significant growth of Hong Kong's asset and wealth management industry, driven by Chinese institutions, which have outperformed the industry average for five consecutive years, with a management scale reaching 3.09 trillion HKD and a net inflow increase of 68% [1][3][7]. Group 1: Market Growth and Drivers - As of the end of 2024, Hong Kong's asset and wealth management business is projected to grow by 13% to 35.14 trillion HKD, with a net inflow surge of 81% to 705 billion HKD [3][4]. - The growth is attributed to three main factors: the appreciation of existing assets, global capital rebalancing, and policy optimization [3][4]. - The Hang Seng Index rose by 18% over the past year, and the Chinese dollar bond index increased by 12%, boosting the net value of existing assets [3][4]. Group 2: Chinese Institutions' Performance - Chinese institutions have shown remarkable performance, with a management scale growth of 15% to 3.09 trillion HKD, and a 25% increase since 2020 [7][8]. - The success of Chinese institutions is linked to their deep understanding of domestic investors' needs and their ability to innovate in offshore RMB products [7][9]. - The net inflow for Chinese institutions reached 256 billion HKD, reflecting their dominant role in the cross-border financial mechanisms [9]. Group 3: Investment Strategies and Asset Allocation - As of December 31, 2024, 58% of assets managed in Hong Kong are allocated to non-equity assets, with 59% of these investments in non-stock asset categories [11][12]. - The increase in non-equity asset allocation is driven by proactive strategies, including capturing policy benefits and innovating fixed-income products [11][12]. - Chinese institutions are focusing on low-volatility asset construction, providing tailored investment solutions that align with domestic investors' risk preferences [12]. Group 4: Future Development and Opportunities - Future growth for Chinese institutions is expected to stem from optimizing cross-border mechanisms, maintaining innovation, and leveraging advanced technologies like blockchain and AI [14][15]. - The expansion of cross-border financial products, such as the ETF and wealth management programs, is anticipated to enhance the inflow of capital and diversify investment options [14][15]. - The article suggests that the mutual recognition of ETFs should be expanded to position Hong Kong as a global asset allocation hub [15].

编者按：7月21日，小摩发布研究报告指出，对于 2025 年下半年，预计在恒生指数上半年取得 18% 的 美元回报率且相对亚太除日本指数跑赢约 5% 之后，短期内会出现盘整，原因包括不确定的关税风险、 美联储不太可能降息的前景、不及预期的刺激政策以及 8 月疲软的季节性因素。这种潜在的疲软将是一 个买入机会，因为强劲的股票市场融资、南向资金流入以及稳定币领域的创新可能会推动 EPS 修正。 指数目标：将 2025 年底恒生指数的基准 / 乐观 / 悲观目标从之前的 11,600/12,400/10,300 港元上调至 13,000/14,000/11,000 港元，对应回报率分别为 2%/10%/-14%。 中小盘股首选：美高梅中国和中国建筑国际。 | RIC Code | Security Name | CN Name | GICS Sector | Analyst | JPM rating | | --- | --- | --- | --- | --- | --- | | Large caps | | | | | | | 1299.HK | AIA Group Ltd | 友邦保险 | Financial ...

Core Viewpoint - The Hong Kong Securities and Futures Commission (SFC) is actively collaborating with mainland regulatory bodies to incorporate a Renminbi (RMB) stock trading counter into the Stock Connect program, aiming to enhance cross-border investment opportunities and facilitate RMB internationalization [1][4]. Group 1: RMB Trading Counter Implementation - The SFC plans to announce implementation details for the RMB stock trading counter soon, which is expected to encourage more companies to consider issuing RMB-denominated stocks [1]. - The Hong Kong Stock Exchange (HKEX) launched the "HKD-RMB Dual Counter" model on June 19, 2023, allowing investors to purchase Hong Kong stocks directly in RMB, with 24 blue-chip stocks, including Tencent and Alibaba, participating [1]. - From June 19, 2023, to July 10, 2025, the cumulative trading volume for the RMB counters of the first 24 dual-counter securities reached approximately 50.116 billion RMB [1]. Group 2: Benefits for Mainland Investors - The inclusion of the RMB counter in the Stock Connect allows mainland investors to trade Hong Kong stocks directly in RMB, eliminating the need for currency conversion and associated costs [2]. - As of July 10, 2023, there are 550 stocks eligible for Stock Connect, with a total market capitalization of 66.36 trillion HKD [2]. - The RMB counter is expected to reduce exchange rate risks and improve actual investment returns for mainland investors by avoiding currency conversion losses [2][3]. Group 3: Impact on RMB Internationalization - The incorporation of the RMB trading counter is anticipated to accelerate the internationalization of the RMB, expanding its role in cross-border investments and enhancing pricing consistency for RMB assets globally [4]. - The HKEX is seen as a testing ground for various cross-border financial mechanisms, reinforcing its position as a hub for international capital accessing the Chinese market [4]. - Future developments may include the introduction of RMB-denominated bond futures and other tools to help investors manage interest rate risks [3][4].

Core Insights - Hong Kong Exchanges and Clearing Limited (HKEX) celebrated its 25th anniversary, evolving from a local exchange to a leading global international exchange [1] - In 2025, HKEX's IPO financing amount is expected to reclaim the global top position after six years, with 31 IPO projects raising a total of 884 billion HKD this year, surpassing last year's total [1][2] - The daily trading volume in the securities market has increased from approximately 130 billion HKD in 2000 to over 2400 billion HKD, representing a more than 17-fold increase [1] - The market capitalization has grown from 86 billion HKD in 2000 to 4960 billion HKD, an increase of over 56 times [1] - The number of listed companies on the Hong Kong stock market has surged from 790 to over 2600 [1] IPO Trends - From 2009 to 2021, HKEX ranked first globally in IPO fundraising seven times, but faced a decline starting in 2022, only returning to the top five in 2023 due to large companies like Midea listing [2] - Between 2014 and 2024, HKEX's cumulative IPO fundraising reached 303 billion USD, surpassing NASDAQ and NYSE, with mainland companies becoming a significant pillar of this market [2] - As of June 8, 2023, there are 165 mainland companies queued to list on HKEX, a significant increase from nearly 80 in mid-January [2] Market Reforms and Innovations - HKEX has implemented various reforms over the past 25 years, adapting to market needs and attracting a diverse range of investors and products [3] - The exchange has shifted its listing rules to accommodate unprofitable companies, particularly in the biotech and internet sectors, which are now seen as valuable listings [3] - HKEX aims to position itself as a leading fundraising hub for new economy and biotech companies, as well as a global offshore RMB business center [3] Cross-Border Financial Cooperation - The launch of the Cross-Border Payment System on June 22 aims to enhance financial cooperation between mainland China and Hong Kong, facilitating cross-border remittances [5] - Since the introduction of various mutual market access programs, the total balance of foreign investment in onshore stocks has increased over five times, with mainland companies now accounting for 81% of the total market capitalization of HKEX [5] - The mutual access mechanisms have expanded from stocks to include bonds, ETFs, and interest rate swaps, with further developments planned [6] Future Outlook - HKEX is focused on enhancing its market resilience and vibrancy, with ongoing improvements to trading systems and infrastructure [6] - The recent policy changes allow companies listed on HKEX in the Guangdong-Hong Kong-Macao Greater Bay Area to also list on the Shenzhen Stock Exchange, potentially increasing the number of "H+A" listed companies [6]

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) emphasizes the importance of continuous reform in listing rules to create a favorable investment environment, rather than focusing solely on absolute rankings [1][12]. Group 1: Development and Growth - HKEX has evolved from a local exchange to an international market connecting China and the world, with the number of listed companies increasing from 790 in 2000 to over 2600 today [2][6]. - The total market capitalization of the Hong Kong stock market has grown sixfold, and the average daily trading volume has increased ninefold, reaching over 2400 billion HKD compared to 130 billion HKD in 2000 [3][6]. - As of June 20, 2023, HKEX has completed 31 IPOs this year, raising a total of 884 billion HKD, surpassing the total financing amount for the entire previous year [2][8]. Group 2: Market Dynamics and Trends - There has been a significant shift in the types of companies listed, with an increase in technology and new economy firms, particularly those that were previously unprofitable, such as biotech companies [8]. - The proportion of new economy companies listed on HKEX has increased, with major mainland companies like SF Express and Midea Group seeking dual listings in Hong Kong [8]. - The market has seen a resurgence of interest from international capital, particularly in innovative technology and new consumption enterprises [4]. Group 3: Future Outlook and Initiatives - HKEX aims to continue enhancing its international presence and will promote its market abroad in the second half of the year [4]. - The exchange is expanding its connectivity mechanisms, which now include stocks, bonds, ETFs, and interest rate swaps, with plans to incorporate Real Estate Investment Trusts (REITs) in the future [11][13]. - HKEX is committed to optimizing its trading infrastructure and improving the trading experience for participants, including potential adjustments to trading fees and the cancellation of trading halts due to adverse weather [14].

Core Viewpoint - Hong Kong Exchanges and Clearing Limited (HKEX) has established itself as a vital international financial center, celebrating its 25th anniversary with significant growth in market metrics and a commitment to connecting China with global markets [1][2]. Group 1: Market Growth and Performance - Since its inception, HKEX has transformed from a local exchange to a leading global market operator, with average daily trading volume exceeding HKD 240 billion in 2023, a more than 17-fold increase from HKD 13 billion in 2000 [1]. - The derivatives market has seen even more remarkable growth, with average daily trading volume reaching 1.76 million contracts in 2023, compared to just 37,500 contracts in 2000 [1]. - The new stock market remains active, with HKEX completing 31 IPOs in 2023, raising over HKD 88.4 billion, solidifying its position as the world's leading fundraising market [2]. Group 2: Market Capitalization and Dividends - The total market capitalization of the Hong Kong stock market surged from HKD 3.92 trillion in March 2022 to HKD 40.93 trillion by May 2025, representing an increase of over 9 times [2]. - Total dividends distributed by Hong Kong-listed companies increased from HKD 907 million in 2000 to over HKD 13.5 trillion in 2024, marking a growth of more than 10 times [2]. Group 3: Strategic Initiatives and Future Outlook - HKEX has played a crucial role in facilitating the listing of mainland companies, attracting trillions in capital and enhancing the connectivity between the mainland and international markets [3][4]. - The exchange has implemented various reforms, including the introduction of the Stock Connect program, which has expanded to include bonds, ETFs, and interest rate swaps, with plans for further enhancements [5]. - HKEX aims to continue improving its market appeal and competitiveness, focusing on optimizing infrastructure and expanding its product offerings to support quality enterprises globally [5].