Overseas: Hong Kong stocks welcome the opportunity to increase allocation, expected to outperform A shares in the second half of the year.

Guotai Haitong Overseas Strategy Team released a research report stating that since the end of June, the Hong Kong stock market has been weakly affected by tariffs and exchange rates. Currently, the heat in the technology and dividend sectors is lower than that in A-shares, while the heat in the pharmaceutical and consumer sectors is relatively high. With important meetings approaching, the easing of tensions between China and the US, and the accumulation of positive factors, it is believed that the Hong Kong stock market has entered a time for increased allocation and is expected to outperform A-shares in the second half of the year. With the relaxation of US restrictions on advanced chips and the accelerated trend of AI applications, the space for profit and the relatively low heat in the technology sector of Hong Kong stocks may be larger. How does the temperature of Hong Kong stocks compare to that of A-shares? Since late June, Hong Kong stocks have been weak, but this week, with the positive catalysts of policies and industries, the market has warmed up, with the Hang Seng Bio-Technology Index rising by 12.7% and the Hang Seng Technology Index rising by 5.5% within the week. Our previous reports have pointed out that the second half of the year is promising for the performance of Hong Kong stocks, as Hong Kong stocks are the main battlefield of this bull market. Therefore, it is currently a time for increased allocation of Hong Kong stocks. So, from the current perspective, how does the temperature of various sectors of Hong Kong stocks compare to A-shares? This article analyzes this. In the first half of the year, Hong Kong stocks led global markets, but have been weak since the end of June. In the first half of the year, with sectors such as AI applications, new consumption, and innovative drugs driving Hong Kong stocks, the performance of Hong Kong stocks has been outstanding, with gains ranking among the top in global markets. This is due to the unique advantages of Hong Kong stocks compared to A-shares, as discussed in "Hong Kong stocks are the main battlefield of this bull market - 20250608." During the period from January to June, the Hang Seng Index rose by 20%, and the Hang Seng Technology Index rose by 19%, higher than the S&P 500's 5.5%, FTSE 100's 3.9%, Shanghai Composite's 2.8%, and Nikkei 225's 1.5%. However, since the end of June, Hong Kong stocks have underperformed A-shares, mainly due to disturbances from US tariff policies and the Hong Kong dollar exchange rate. On one hand, following the approval of the "Bigger and Better" Act in early July, the focus of Trump's policies returned to the area of tariffs. On July 9th, Trump announced a 50% tariff on imported copper starting from August, and launched a new round of tariff pressure on economies such as Brazil, the EU, and Mexico. On July 16th, Trump announced that tariffs of 10% or 15% will be uniformly imposed on more than 150 minor trade partners of the United States. On the other hand, influenced by factors such as the widening gap between the Hong Kong-US interest rates and active arbitrage trading, the Hong Kong dollar exchange rate against the US dollar has touched the weak side exchange guarantee since late June. Hong Kong's interbank market liquidity closed with a total surplus of funds decreasing from 173.52 billion...