Northbound funds | Net buying of 19.804 billion in the northern waters, with market sentiment impacted by the grey rhinoceros. Domestic investors seize the opportunity to buy on dips. The Tracker Fund of Hong Kong (02800) near 7.3 billion Hong Kong dollars.

On October 13th, in the Hong Kong stock market, the net purchase of Northbound funds amounted to 19.804 billion Hong Kong dollars. Of this, the Shanghai-Hong Kong Stock Connect saw a net purchase of 7.598 billion Hong Kong dollars, while the Shenzhen-Hong Kong Stock Connect saw a net purchase of 12.206 billion Hong Kong dollars. The top stocks purchased by Northbound funds were the Tracker Fund of Hong Kong (02800), Hang Seng H-Share Index ETF (02828), and Hua Hong Semiconductor (01347). The top stocks sold by Northbound funds were Tencent (00700), Alibaba-W (09988), and Semiconductor Manufacturing International Corporation (00981). In terms of actively traded stocks for the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, Northbound funds were seen buying Hong Kong ETFs on dips, with the Tracker Fund of Hong Kong (02800) and Hang Seng H-Share Index ETF (02828) receiving net purchases of 7.282 billion and 2.134 billion Hong Kong dollars respectively. On the news front, the US recently announced a 100% tariff on Chinese goods. CMSC believes that this tariff threat should be seen as a bargaining chip rather than a goal, and the probability of a 100% tariff being implemented is low. Galaxy Securities stated that in the short term, the escalation of trade tensions between China and the US has led to a decrease in investor risk appetite, driving down the valuation of Hong Kong stocks. However, with support from domestic growth stabilization policies and the impact of medium-to-long term measures to stabilize the stock market, investor sentiment is expected to gradually stabilize. Chip stocks continue to show differentiation, with Hua Hong Semiconductor (01347) receiving net purchases of 1.347 billion Hong Kong dollars, while Semiconductor Manufacturing International Corporation (00981) saw net sales of 523 million Hong Kong dollars. On the news front, on October 8th, the US House of Representatives' "Special Committee" released an important report on China's semiconductor export controls, proposing measures such as strengthening comprehensive export controls on China, expanding the scope of the "Entity List," and 9 other regulatory measures; on October 10th, China's State Administration for Market Regulation launched an investigation into Qualcomm for its acquisition of Autotalks, which is suspected of violating the Anti-Monopoly Law. The 2025 Bay Area Semiconductor Industry Ecology Expo hosted by Newcalai is set to launch a major new product on October 15th-17th; in addition, the securities lending conversion rate for Semiconductor Manufacturing International Corporation and Biwin Storage Technology has been adjusted back to 70% and 50% respectively. Xiaomi-W (01810) fell nearly 9% during trading, with Northbound funds making net purchases of 888 million Hong Kong dollars throughout the day. On the news front, according to reports from multiple media outlets, early on October 13th, a Xiaomi SU7 caught fire after colliding while driving on the main road of Tianfu Avenue in Chengdu, Sichuan, with several people unable to open the door of the SU7 despite their efforts. This has once again raised questions about the safety of electronic car door handles among the public. Kingsoft (03888) received net purchases of 286 million Hong Kong dollars. On the news front, on October 9th, the Ministry of Commerce issued Announcement No. 61 of 2025. Export controls will be imposed on some overseas rare earth-related items containing Chinese components. Apart from the control rules, the appendix adopts the WPS format, requiring that relevant application documents be submitted in Chinese, sparking discussion on two major details. WPS is office software independently developed by Beijing Kingsoft Office Software, Inc. Northbound funds sold off tech stocks, with Alibaba-W (09988) and Tencent (00700) seeing net sales of 24.45 billion and 16.23 billion Hong Kong dollars respectively. On the news front, both China and the US announced a series of export control measures last week. Research from Lyon noted that escalating trade tensions will create pressure on the performance of Chinese internet stocks. However, the operational impact on Tencent and Alibaba should be limited, and it is believed that US regulatory measures will have a hard time curbing China's development in AI in the short term. In addition, Meituan-W (03690) and ZTE Corporation (00763) received net purchases of 806 million and 724 million Hong Kong dollars respectively. Meanwhile, Innovent Bio (01801) saw net sales of 515 million Hong Kong dollars.