Core Viewpoint - The Hong Kong stock market has experienced continuous fluctuations and adjustments since October, with the Hang Seng Index dropping from 27,000 points to nearly 25,000 points, but has shown signs of recovery on October 21, with strong performances in industrial and non-bank financial sectors [1] Market Performance - The Hang Seng Index saw a significant decline, reaching a low of nearly 25,000 points from 27,000 points [1] - On October 21, the market rebounded, with all three major indices opening high and showing upward momentum [1] Capital Flow - Despite the market's adjustments, southbound capital has maintained a net inflow, indicating ongoing investment interest [1] - Industry insiders suggest that the incremental southbound capital is still in the process of entering the market, which is expected to continue providing support [1] Long-term Outlook - The short-term volatility in the Hong Kong stock market has not altered the long-term upward trend, as indicated by the sustained inflow of southbound funds [1]

Group 1 - The Hong Kong stock market has rebounded strongly for two consecutive days, with the Hang Seng Index rising by 1.7% and the Hang Seng Tech Index increasing by 2.7% [1] - The rebound is attributed to the easing of trade tensions and the reduction of panic over U.S. credit issues, leading to a 2.4% increase in the Chinese concept stocks index overnight, with Alibaba and NetEase both rising over 4% [1] - Traders are currently predicting a 99% probability of a Federal Reserve rate cut next week, with another cut expected in December [1] Group 2 - The net inflow of southbound funds and ETF investments into Hong Kong stocks has been significant, with over 45 billion HKD flowing in during October, marking a record high of 1.2 trillion HKD net purchases for the year [1] - The Southern Tech ETF (159269) has seen a net inflow of 1.513 billion HKD since July 25, with the lowest management and custody fees in its category at 0.35% [1] - The Southern Innovative Drug ETF (159297) has experienced continuous net subscriptions since its listing on September 22, with a total net inflow of 478 million HKD and a combined management and custody fee of 0.2%, also the lowest among similar products [1] Group 3 - Guoyuan International believes that the biggest external uncertainty facing the market is the U.S.-China rivalry, which affects investor sentiment and causes short-term market fluctuations [2] - Despite short-term volatility, there is a strong possibility that the Hang Seng Index will return to an upward trend, as ongoing negotiations between the two sides keep overall risk levels manageable [2] - The expectation is that once external disturbances decrease, the Hong Kong stock market will present a better entry opportunity, with a quick recovery anticipated after short-term adjustments [2]