Core Viewpoint - The Hong Kong stock market is experiencing a significant increase in stock buybacks, with 209 companies repurchasing a total of 4.466 billion shares and spending over 100 billion HKD this year, indicating a broader participation in buyback activities compared to the previous year [1][3]. Group 1: Buyback Trends - A total of 209 Hong Kong-listed companies have engaged in stock buybacks this year, with a cumulative repurchase of 4.466 billion shares and an expenditure exceeding 100 billion HKD [1]. - The number of companies participating in buybacks has increased by 9 compared to the same period last year, reflecting an expanding coverage of buyback activities among listed firms [1]. - Major companies such as Tencent Holdings, Kuaishou-W, HSBC, and AIA have made substantial buybacks, with Tencent leading at 40.043 billion HKD [3]. Group 2: Industry Participation - The buyback activities span multiple key sectors, including internet technology (Tencent, Kuaishou-W), finance (HSBC, AIA), materials (China Hongqiao), and healthcare (WuXi Biologics) [3]. - Tencent Holdings has repurchased shares on 62 trading days, averaging over 600 million HKD per day, with significant single-day repurchases reaching 1.503 billion HKD on specific dates [3]. Group 3: Policy Impact - The upcoming stock repurchase reform by the Hong Kong Stock Exchange, effective June 2024, allows companies to hold repurchased shares as treasury stock instead of mandatorily canceling them, enhancing buyback efficiency [4]. - This reform provides companies with greater flexibility and convenience in managing their buyback activities, which is expected to further stimulate repurchase actions [4]. - The trend of stock buybacks is viewed as a means to enhance shareholder value, especially when companies have excess cash flow and lack high-return investment opportunities [4].

Core Viewpoint - The Hong Kong stock market is experiencing a surge in share buybacks, indicating positive signals for company value maintenance and overall market performance [1][4]. Group 1: Share Buyback Activity - As of July 21, 2023, 209 Hong Kong-listed companies have repurchased a total of 4.466 billion shares, with a total buyback amount exceeding 1,036.18 million HKD [2][3]. - The number of companies participating in buybacks has increased by 9 compared to the previous year, indicating a broader coverage of buyback activities among listed companies [2]. - Major companies leading the buyback amounts include Tencent Holdings (400.43 million HKD), HSBC Holdings (203.33 million HKD), and AIA Group (176.93 million HKD), among others [3]. Group 2: Market Performance - The Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Technology Index have all risen over 24% year-to-date, outperforming major global markets [1][4]. - The healthcare, materials, and information technology sectors have shown significant gains, with increases of 70.02%, 59.35%, and 34.01% respectively [5]. - Over 80% of the constituent stocks in the Hang Seng Index have risen, with notable performers including China Biologic Products and Hansoh Pharmaceutical, both up over 110% [5]. Group 3: Future Market Outlook - Analysts expect the Hong Kong stock market to continue its upward trend, characterized by structural market conditions, with a rolling P/E ratio of 11.11, up from 8.96 at the beginning of the year [6][7]. - Factors such as potential U.S. interest rate cuts and positive changes in domestic real estate policies are anticipated to support further market gains [7]. - Investment strategies should focus on high-dividend stocks, sectors benefiting from policy support, and companies with better-than-expected mid-year performance [7][8].

Core Viewpoint - Morgan Stanley's China Index (MXCN) is expected to fluctuate between 70-80 in the near term, with potential upside in the second half of 2025, predicting MXCN to reach 80 and the CSI 300 to reach 4,150 by the end of 2025, representing increases of 5.1% and 5.8% respectively from last Friday's closing prices [1][2] Group 1: Earnings Outlook and Industry Weighting - MXCN's EPS is anticipated to have upside potential exceeding consensus, while the consensus EPS growth forecasts for CSI 300, CSI 500, and CSI 1000 are expected to face downside risks due to their heavier exposure to real estate and overcapacity sectors [3] - Morgan Stanley has resumed overweighting in Information Technology (IT) after a pause, while continuing to overweight Communication Services, Consumer Discretionary, Healthcare, and Materials, and underweighting Energy and Utilities [3] Group 2: Preferred Themes and Stocks - The shift from "affordable enjoyment" to "affordable experience" highlights the relative value of sectors like education and family entertainment, which have outperformed since February 2025 [4] - High dividend stocks remain favored by domestic investors seeking higher yields in a low-risk interest rate environment [5] - Preferred stocks for the second half of 2025 include Tencent and Tencent Music in Communication Services, Alibaba and MGM China in Consumer Discretionary, Futu Holdings and Huatai Securities in Financials, and several others across various sectors [6][8] Group 3: Market Scenarios and EPS Projections - In the base case scenario, MXCN is projected to reach 80, with a consensus EPS growth of 6% year-on-year for 2025, while optimistic scenarios could see it rise to 89, driven by favorable global liquidity and a supportive policy environment for private enterprises [10][11] - The pessimistic scenario considers heightened market competition and potential overcapacity, which could negatively impact EPS consensus [11] - The consensus EPS for MXCN is currently stable at HKD 6.2, with potential upside risks due to increasing applications of artificial intelligence [11][12]

Core Viewpoint - The market is expected to continue its oscillating trend in the upcoming week due to weak market sentiment and technical indicators suggesting a downward trend [1][2]. Market Overview - The liquidity shock indicator for the CSI 300 index was 1.23, indicating current market liquidity is 1.23 times higher than the average level over the past year [2]. - The PUT-CALL ratio for the SSE 50 ETF options increased to 1.06, reflecting a growing caution among investors regarding the short-term performance of the SSE 50 ETF [2]. - The five-day average turnover rates for the SSE Composite Index and Wind All A were 0.81% and 1.37%, respectively, indicating a decrease in trading activity [2]. Macroeconomic Factors - The onshore and offshore RMB exchange rates experienced slight fluctuations, with weekly changes of -0.03% and 0.14%, respectively [2]. - Recent economic data from the National Bureau of Statistics showed that in May, the industrial added value for large-scale enterprises grew by 5.8% year-on-year, and retail sales of consumer goods increased by 6.4% [2]. - Fixed asset investment for the first five months of the year rose by 3.7% year-on-year, with high-tech manufacturing and digital economy sectors showing significant growth [2]. Technical Analysis - The Wind All A index broke below the SAR point on June 19, indicating a bearish trend [2]. - The market score based on the moving average strength index is currently at 102, which is at the 39.7% percentile since 2021 [2]. - The sentiment model scored 1 out of 5, indicating weak market sentiment, while the trend model signal is positive and the weighted model signal is negative [2]. Market Performance - For the week of June 16-20, the SSE 50 index fell by 0.1%, the CSI 300 index decreased by 0.45%, the CSI 500 index dropped by 1.75%, and the ChiNext index declined by 1.66% [3]. - The overall market PE (TTM) stands at 19.2 times, which is at the 52.3% percentile since 2005 [3]. Factor Observations - The crowding degree for small-cap factors has decreased, with a current score of 0.79 for small-cap factors, -0.14 for low valuation factors, -0.11 for high profitability factors, and 0.00 for high profitability growth factors [3]. - The industry crowding degree is relatively high for sectors such as comprehensive, environmental protection, machinery equipment, banking, and non-ferrous metals, with notable increases in banking and medical biotechnology sectors [3].

Group 1 - The People's Bank of China and the Central Bank of Turkey have renewed a bilateral currency swap agreement worth 35 billion RMB, equivalent to 189 billion Turkish Lira, with a validity of three years [1] - This agreement marks a new phase in financial cooperation between China and Turkey, facilitating cross-border settlements in local currencies and promoting bilateral trade and investment [3] - As of May 31, 2025, the People's Bank of China has signed bilateral currency swap agreements with 32 central banks, with an outstanding balance of 81.8 billion RMB utilized by foreign central banks [3] Group 2 - Southbound capital transactions reached a record high of 640.38 billion HKD this week, marking a 56.36% increase from the previous week [4] - Notable stocks with high trading volumes include Xiaomi Group-W, Alibaba-W, Meituan-W, and Pop Mart, each exceeding 20 billion HKD in total transactions [4] - Meituan-W saw the highest net buy of 3.605 billion HKD despite a 2.47% decline in stock price, indicating sustained interest from southbound capital [4] Group 3 - Three stocks experienced significant increases in holdings, with Yimai Sunshine, BYD Company, and China National Nuclear Power leading the growth at 116.02%, 40.38%, and 37.05% respectively [5] - Yimai Sunshine's holdings doubled to 40.776 million shares, despite a 17.21% drop in stock price, following the acquisition of 100% equity in Zhongya Diagnostics [5] - BYD Company reported a record weekly increase in holdings of 20.188 million shares, with a total of 70.1799 million shares held, as the company aims to standardize supplier payment terms to within 60 days [5]

Group 1: A-Share and Hong Kong Market Insights - The Hong Kong stock market has entered a technical bull market since the beginning of the year, while the A-share market remains volatile. Net inflows from southbound funds have approached 400 billion HKD year-to-date [1] - It is suggested that a reasonable allocation of Hong Kong stocks in Chinese equity assets should be between 40%-50%, indicating significant room for institutional investors, especially public funds, to increase their allocation to Hong Kong stocks [1] Group 2: U.S. Market Strategy - Recent shifts in Trump's tariff policy suggest a potential easing, with indications of a "Trump Put" emerging. The Fed's stance may also be shifting towards a more accommodative policy, which could pave the way for future rate cuts [3] - Despite the S&P 500 and NASDAQ 100 remaining at relatively high valuations, there has been a noticeable contraction since mid-February. The market may have already priced in uncertainties related to Trump's policies, and a technical rebound in tech stocks is anticipated [3] - Mid-term concerns include the potential escalation of global trade tensions, the evolution of the U.S. macroeconomic fundamentals, and the upcoming fiscal X-date, which could disrupt the U.S. market [3] Group 3: Banking and Financial Products - The scale of China's banking wealth management market has been expanding, with various distribution channels evolving. The introduction of the "Commercial Bank Agency Sales Business Management Measures" marks a new era of regulation in bank sales [5] - The competition in the banking wealth management sector is expected to focus on both "channel supremacy" and "product supremacy" [5] Group 4: Bond Market Dynamics - The liquidity landscape has undergone significant changes since the beginning of the year, attributed to the central bank's efforts to build a differentiated liquidity management system. A "tight balance" in the funding environment is expected to persist [7] - With a more relaxed central bank stance, the likelihood of long-term bond yields declining has improved, although short-term rates may remain volatile without substantial easing [7] Group 5: Fiscal Data and Economic Indicators - National fiscal revenue growth has declined, with major tax categories like VAT and corporate income tax showing negative growth, indicating ongoing pressure on corporate operations. Fiscal expenditures have been progressing rapidly, particularly in social security and employment [10] - The government fund revenue continues to decline significantly, while expenditures have seen slight growth, suggesting that policies may be gearing up for potential disturbances related to tariffs [10] Group 6: Emerging Industries - The controllable nuclear fusion industry is viewed as a strong investment opportunity due to anticipated policy signals and a significant order concentration expected in the near term. The overlap with the nuclear power and military materials sectors is also noted [12] - In the energy storage sector, a recent 500 billion Euro fiscal spending bill in Germany, which includes 100 billion Euros for climate and transformation funds, is expected to catalyze a recovery cycle in the European energy storage market, benefiting domestic companies [13]

Global Market Overview - The report highlights increased concerns over a "Trump recession" and "stagflation" due to uncertainties surrounding Trump's tariffs and trade policies, leading to significant market volatility globally [1][4] - Major global markets experienced notable fluctuations, with the US stock market showing a significant pullback in the first half of the week followed by a rebound in the latter half [1][4] - The TAMAMA Technology Index fell by 2.62%, while the Philadelphia Semiconductor Index decreased by 0.67%, indicating a downward trend in technology stocks [1][4] US Market Performance - The S&P 500, Nasdaq, and Dow Jones Industrial Average all recorded declines of 2.27%, 2.43%, and 3.07% respectively during the week [11][4] - The S&P 500's Shiller PE ratio stands at 35.21, which, despite a slight decrease, remains significantly above historical averages, suggesting high valuations across various sectors [1][4] - The report notes that sectors such as finance, consumer goods, healthcare, and industrials may face pressure due to high valuations [1][4] Hong Kong Market Performance - The Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Hong Kong Chinese Enterprises Index all experienced declines of 1.12%, 0.4%, and 0.27% respectively [18][4] - The Hang Seng Technology Index dropped by 2.59%, reflecting a broader trend of pullbacks in technology stocks [18][4] - The report suggests that certain sectors within the Hong Kong market, such as technology and healthcare, may present mid-term structural opportunities due to low valuations and fundamental support [30][4] Economic Data Insights - The US Sentix Investor Confidence Index for March 2025 was reported at -2.7, significantly lower than the previous value of 21.2, indicating a decline in investor sentiment [36][4] - The report also notes that the US CPI year-on-year growth rate for February 2025 was 2.8%, down from 3%, and the core CPI growth rate was 3.1%, down from 3.3% [31][4]