HAITONG INT'L: BABA-W(09988) received 22 billion Hong Kong dollars of inflow from Southbound funds last week, expecting Hong Kong stocks to remain volatile.

Haitong International recently released a report stating that earlier the bank believed that the A-share market would consolidate and digest previous gains in September, while the Hong Kong stock market is expected to receive short-term boost from easing liquidity pressure and a stronger renminbi. Last week, the A-shares experienced intense fluctuations, with the Shanghai Composite Index rising by 1.5% for the week, and the ChiNext Index continuing to fluctuate significantly, rising by 2.1% for the week; Hong Kong stocks rebounded under the influence of the sharp rise in US technology stocks, with the Hang Seng Index rising by 3.8% and the Hang Seng Technology Index rising by 5.3% last week. Following Federal Reserve Chairman Powell's dovish signal at the Jackson Hole meeting, gold began a new round of gains, with London gold rebounding by over 9%; however, this week's US inflation data further confirmed expectations of interest rate cuts, causing gold prices to fluctuate. The US dollar index maintained a narrow range during the same period, still holding onto the lows of July; emerging markets and Hong Kong stocks started to rebound from September 5th. Against the backdrop of market expectations of rate cuts, if the Fed cuts rates by 25 basis points on September 17th, it may trigger profit-taking, putting pressure on gold and emerging markets, while the US dollar may rebound; if the rate cut exceeds expectations at 50 basis points, the current bullish trend is likely to continue. Last week, technology stocks in the A-share market experienced high volatility, with the easing of property purchase restrictions and loans in Shenzhen on September 5th, and the four major first-tier cities are fully relaxing these measures, boosting property sentiment, while consumer real estate is still gaining momentum, with potential breakthrough catalysts in future policies. Last week, liquidity in the Hong Kong stock market remained stable, with the momentum of boosting sentiment continuing, and it will still be necessary to closely monitor the exchange rate trend in the future. Continued boost in sentiment: Alibaba surged again with its self-developed chip and the next-generation Qwen3 model, leading to a continued increase in risk appetite. Stable liquidity: HIBOR remained stable this week; with the expectation of rate cuts driving it, the renminbi moderately appreciated against the US dollar; however, if the US dollar rebounds later, the support of the exchange rate for Hong Kong stocks may weaken. Last week, the AH premium index adjusted to add 22 groups and remove 5 groups of AH stocks, with the premium significantly falling to around 120, and it may tend to normalize. Southbound funds saw a significant net inflow of 60.8 billion Hong Kong dollars last week, with BABA-W (09988) continuing to receive an inflow of 22 billion Hong Kong dollars, totaling a significant inflow of 37 billion Hong Kong dollars since September. In summary, US technology stocks surged in the third quarter driven by earnings reports, with the Nasdaq hitting a new high again, and the market has fully factored in expectations of three interest rate cuts this year, boosting the strong rebound of A-share technology stocks, and the Hong Kong stocks rebounded under the influence of Alibaba and BIDU-SW (09888). However, as the US technology earnings phase ends and US-China trade tensions resurface, the short-term improvement in liquidity for A-shares and Hong Kong stocks is unlikely, and it is probable that the market in September will continue to be volatile. In terms of industries, it is still advisable to position oneself in large-cap blue-chip stocks on dips, with a focus on consumer real estate, anti-inner circle policies, and non-bank financial sectors.