A-shares are closed, but enthusiasm is high in Hong Kong stocks.

After yesterday's correction, the Hong Kong market regained its strong momentum on October 4. In terms of indexes, the Hong Kong Hang Seng Index closed up 2.82% at 22,736.87 points, a two-and-a-half-year high, and the Hang Seng Tech Index rose 4.99% to 5,227.13 points.

Looking at individual stocks, in today's stock market, the share price of Hongguang Semiconductor soared by more than 285%, the increase of Solomon Semiconductor also reached 70%, the share prices of Hua Hong Semiconductor and SMIC both increased by nearly 30%, and Chinese brokerage stocks also performed well. The share price of Zhongzhou Securities rose by more than 29%, the share price of Shenwan Hongyuan rose by more than 25%, and the share price of Guolian Securities rose by more than 27%.

Judging from the recent foreign investment trends, many foreign institutions are also rushing to buy Hong Kong stocks. On October 4, the latest disclosure of the Hong Kong Stock Exchange showed that JPMorgan Chase bought China Pacific Insurance H shares worth HK$267 million, BYD H shares worth HK$1.791 billion, Tsingtao Brewery H shares worth HK$242 million, and Hong Kong Stock Exchange H shares worth HK$1.813 billion on September 27. In other words, JPMorgan Chase spent HK$4.1 billion on Chinese assets in one day.

Market insiders exclaimed: "Foreign capital has come to China to 'grab money'!"

JPMorgan Chase bought HK stocks worth 4.1 billion in a single day

Since September, the Hong Kong stock market has ushered in a round of rapid rise. Although the rapid rise of the market has triggered concerns about a short-term correction, the recent movements of large foreign institutions show that they are still actively increasing their holdings of Hong Kong stocks.

For example, JPMorgan Chase has been particularly active in this wave of share purchases. According to data recently disclosed by the Hong Kong Stock Exchange, many Hong Kong-listed companies, including the Hong Kong Stock Exchange, BYD Co., Ltd., Bilibili-W, Jiu Mao Jiu International, and Ganfeng Lithium, have received increased holdings from JPMorgan Chase.

Specifically, JPMorgan Chase increased its holdings of BYD shares by about 6.52 million H shares on September 27, with an average transaction price of HK$274.5244, involving a capital of about HK$1.791 billion. After that, JPMorgan Chase's holding ratio increased from 4.85% to 5.45%. It increased its holdings of Hong Kong Stock Exchange by about 6.1164 million shares, involving a capital of about HK$1.813 billion. After the increase, JPMorgan Chase's latest holdings are about 81.42 million shares, and its holding ratio has increased from 5.93% to 6.42%.

On the same day, JPMorgan Chase increased its stake in China Pacific Insurance by approximately 10.14 million shares at an average price of HK$26.2491 per share, involving a capital of approximately HK$267 million. JPMorgan Chase's holding ratio increased from 6.98% to 7.35%. Tsingtao Brewery's shares were increased by approximately 4.375 million H shares, involving a capital of approximately HK$242 million. After the increase, JPMorgan Chase's latest holding ratio increased from 7.60% to 8.27%.

On the previous trading day, September 26, JPMorgan Chase increased its holdings of China Ping An H shares by 39,861,682 shares, spending approximately HK$1.771 billion, and its shareholding ratio increased to 8.28%. On September 25, JPMorgan Chase increased its holdings of China Merchants Bank H shares by HK$895 million.

Foreign capital is rushing in

Judging from the recent trends of foreign investment, a lot of foreign capital is quickly joining this "carnival feast".

According to the latest data from Bloomberg, the scale of funds invested in emerging market ETFs listed in the United States has increased significantly in the past week, with the total amount reaching $3.87 billion, setting a single-week record high since December last year.

Among this inflow of funds, the main inflows went to China's Hong Kong and A-share markets, with a total inflow of US$2 billion. In particular, the four major ETFs targeting the Chinese market attracted about US$1.44 billion in new funds that week, setting a new high since 2022.

The KraneShares CSI China Internet ETF attracted $516 million in inflows. It was followed by the Xtrackers Harvest CSI 300 China A-Share ETF, which also saw inflows of $497 million. Meanwhile, the iShares China Large Cap ETF also saw a rebound in inflows, attracting a total of $271 million. In addition, the iShares MSCI China ETF also saw net inflows of more than $160 million.

In addition, it is reported that hedge fund Mount Lucas Management from the United States has established a bullish position in China ETFs, and Singapore's GAO Capital and South Korea's Timefolio Asset Management are buying Chinese blue-chip stocks.

Guosen Securities recently reported that since late September, foreign capital has been flowing into the Chinese stock market at an accelerated pace. In 2024 (from the beginning of the year to date), the net inflow of Chinese equity funds has exceeded the whole of 2021. Taking the ETF products that are long China in the US stock market as an example, the weekly trading volume of most products as of September 27 increased by 6-7 times compared with the previous week.

Tianfeng Securities said that compared with the global market, Chinese assets are still cost-effective. Based on the expectation of gradual recovery and the expectation of gradual improvement in subsequent fundamentals, the current Hong Kong stocks and Chinese concept stocks are still attractive in valuation and have a high risk-return ratio.

JPMorgan Chase's September A-share research report released on October 2 stated that the unexpected call by the Politburo meeting for strong policies to stimulate the strong rebound of A-shares was driven by three major factors: a decline in the short selling ratio, an increase in margin trading, and investor excitement. Specifically, as of September 30, the short selling ratio in the Hong Kong market dropped from 21.8% on September 16 to 10.2%; the proportion of margin trading in A-shares in total trading volume increased from 7.4% on September 20 to 10.5% on September 27.

JPMorgan Chase believes that the excitement of retail investors, as evidenced by the surge in new account openings, may lead to a narrowing of global funds' exposure to Chinese stocks. The sustainability of the A-share rebound lies in the strength of fiscal policy, macro data and earnings revisions.

The number of Hong Kong stocks held by foreign capital is still rising. Wind data shows that based on the number of shares held by international intermediary institutions, as of October 3, there were 2,632 Hong Kong stocks in the market with shares held by international intermediary institutions. In the past week, a total of 1,054 foreign institutions bought Hong Kong stocks, accounting for more than 40%.

Among them, the Hong Kong stock with the largest increase in holdings by international intermediary institutions within a week was Bosideng, with an increase of approximately 499 million shares. It currently holds 9.591 billion shares. SenseTime-W, China Construction Bank, GCL Technology, Industrial and Commercial Bank of China and other Hong Kong stocks were also increased by foreign institutions during the week, all exceeding 200 million shares.

High dividend stocks, led by bank stocks, are favored by international funds. International intermediaries hold the largest number of CCB shares, reaching 59.161 billion shares, and hold 44.324 billion shares of Bank of China H shares. The number of shares held by ICBC and ABC H shares is 43.831 billion shares and 28.284 billion shares respectively. In addition, ICBC and Bank of China were both heavily increased by international intermediaries during the week, with the increase being more than 100 million shares.