1. Report Industry Investment Rating No relevant content provided. 2. Core Views - Recent liquidity crisis in the US led to a "bond market blood - sucking → risk asset blood - loss" chain. The market is in a capital re - pricing cycle, and the current decline is due to capital cost rather than fundamental deterioration [9]. - The wave of US Treasury issuance and fiscal deficit expansion will strengthen the mid - term pattern of liquidity tightening and asset re - pricing. Dollar liquidity will remain tight from November to December, and rising bond yields will push up global capital pricing and suppress high - valuation assets [9]. - The market is in a phased switch from liquidity flooding to pricing callback. Once fiscal spending resumes and the Fed stops liquidity withdrawal or shifts policy, asset prices will rise again. This is a valuation adjustment, not a structural breakdown [10]. 3. Summary by Related Catalogs 3.1 US Treasury Yield Review - As of November 7, the 10 - year US Treasury yield rose 9bp in two weeks, reaching 4.11%. The 2 - year yield rose 7bp and the 30 - year yield rose 11bp compared to two weeks ago [5]. 3.2 US Treasury Market Changes - In late October, the duration of US Treasury issuance slightly rebounded. The issuance amounts were $68.47 billion for 2 - year, $69.902 billion for 5 - year, and $43.95 billion for 7 - year bonds. The US fiscal deficit in September was $197.9 billion, and the 12 - month cumulative deficit slightly declined to $1.78 trillion [5]. 3.3 Derivatives Market Structure - The net short position in US Treasury futures slightly declined. As of September 23, the net short positions of speculators, leveraged funds, asset management companies, and primary dealers dropped to 5.738 million contracts. The federal funds rate futures market remained net short, rising to 395,400 contracts [5]. 3.4 US Dollar Liquidity and US Economy 3.4.1 Monetary Policy - On October 30, 2025, the Fed cut interest rates by 25bp to 3.75% - 4.00%, and announced to stop balance - sheet reduction in December and reinvest all MBS principal repayments in short - term bonds. Powell emphasized that the decision on further rate cuts in December depends on data [6]. 3.4.2 Fiscal Policy - As of November 5, the US Treasury's TGA deposit balance expanded by $37.63 billion in two weeks, and the Fed's reverse repurchase tool expanded by $18.06 billion, increasing short - term uncertainty in the liquidity buffer [6]. 3.4.3 Economic Situation - As of November 1, the Fed's weekly economic indicator was 2.22 (2.13 two weeks ago), indicating short - term economic improvement after stability [6].

Group 1 - The core viewpoint is that the Hong Kong stock market is experiencing liquidity easing due to the Federal Reserve's interest rate cuts, which may attract international capital to increase allocation in this market [1] - The logic behind this trend is the decline in global risk-free interest rates, leading to asset repricing and capital reallocation [1] - The Hong Kong stock market, as an offshore financial center for China, has a valuation level lower than most major global indices and is highly sensitive to global liquidity [1] Group 2 - Historical data indicates a correlation between foreign capital flow and the interest rate differential between China and the U.S. [1] - Currently, the proportion of foreign capital allocated to Chinese assets is at a historical low, suggesting that valuation gaps and improved policy expectations may drive a systematic return of foreign capital [1] - The Hong Kong Stock Connect 50 ETF (159712) tracks the Hong Kong Stock Connect 50 Index (930931), which selects 50 large-cap, liquid stocks from the Hong Kong market, covering both new economy and traditional industry leaders [1]

Core Viewpoint - The recent recovery in the A-share market has led to increased investor interest and discussions about whether this marks the beginning of a bull market and what investment opportunities are available [4]. Market Recovery Insights - The A-share market has shown a noticeable recovery, with one investor maintaining a 70% position and feeling content with the market's upward movement [6]. - The fund manager emphasizes a bottom-up approach to identify investment opportunities, noting that market activity increases during overall market uptrends, making it easier for undervalued stocks to return to their fair value [6][7]. Market Conditions and Asset Repricing - In recent years, with a pessimistic economic outlook, many investors opted for stable return assets due to risk aversion. However, as market interest rates decline, the yield on these assets has compressed, leading to a rapid repricing of assets as optimism returns [7]. - The fund manager believes that the current market environment is favorable for equity assets, especially as domestic companies are relatively high-quality and recent policies have improved operational stability [7]. Growth and Dividend Assets Performance - Growth and dividend assets have performed well, while large-cap growth stocks have lagged due to macroeconomic influences and a digestion of valuations as growth rates decline [8]. - The fund manager suggests that as the market stabilizes and profitability improves, large-cap growth assets may perform better in the future [8]. Market Timing and Investment Strategies - One investor shares experiences of using a systematic approach to investment, finding that a managed account performed better in timing than personal decisions, leading to a preference for regular investment strategies over market timing [9][10]. - The fund manager advises against trying to time the market, suggesting that understanding historical valuation levels of core indices can provide insights into market conditions [10]. Investment Opportunities - Beyond widely recognized sectors like AI and innovative pharmaceuticals, the concept of "anti-involution" presents non-consensus investment opportunities, particularly in industries that may be at cyclical lows [12]. - Successful past examples of anti-involution include the aluminum and refrigerant industries, where government policies helped improve profitability by limiting excess capacity [13][14]. Hong Kong Market Outlook - The Hong Kong market has shown significant potential, with many quality companies performing well after previous declines, leading to attractive valuations [16]. - The influx of mainland capital and the evolving nature of the market suggest that there are still many investment opportunities in Hong Kong, particularly among smaller companies [16]. Future Investment Strategies - The fund manager's investment philosophy focuses on acquiring quality growth assets at reasonable prices, aiming for moderate returns while managing risk [23]. - The current strategy involves maintaining a mix of stable growth and trend growth assets, while remaining sensitive to early-stage investment opportunities to enhance portfolio flexibility [24].