CMSC: What are the recent micro liquidity issues in the Hong Kong stock market?

CMSC released a research report stating that the recent Hong Kong stock market has not stabilized after overseas interest rate cuts, mainly due to two internal liquidity issues: the implementation of new regulations for public fund benchmarks, which may lead to selling of some Hong Kong stocks; and the relatively large demand for funds in the Hong Kong stock market. Although the above narrative exists and has been reinforced during the decline, the overall impact is relatively limited. CMSC's main points are as follows: Industry and index recommendations: Internet (930604.CSI), non-ferrous metals (931947.CSI), and Hong Kong-listed non-bank financials (931024.CSI). Hong Kong stock market performance last week: Last week (12/08-12/12), the Hong Kong stock market had more declines than gains, with the Hang Seng Index falling by 0.42% and the Hang Seng Technology Index falling by 0.43%. The AH premium maintained at 119.8. Looking at different sectors, last week saw more declines than gains in the Hong Kong stock market, with only the financial and information technology sectors rising, while the energy sector was the worst performer. Micro-fundamentals: Net outflows from the southbound trading link for the first time in six months, while Hong Kong and foreign capital both saw net inflows. 1) The total net outflow of southbound funds was 3.4 billion Hong Kong dollars, mainly flowing towards non-essential consumption; 2) Foreign capital bought a net of 260 million US dollars through ETFs, with the cumulative net inflow reaching a new high since 924; 3) Local Hong Kong ETFs also saw a net inflow of 5.1 billion Hong Kong dollars, with a total net inflow of 45.9 billion Hong Kong dollars since the beginning of the year. Hong Kong liquidity changes: Hong Kong market interest rates are becoming looser, with overnight Hibor at 1.71%, 3-month Hibor rate at 3.03%, and the USD to HKD exchange rate at 7.78, gradually approaching the strong side exchange guarantee. Overseas important liquidity changes: US 2-year treasury yield at 3.522% (down 36bps); 10-year treasury yield at 4.182% (up 47bps). The US Treasury General Account (TGA) balance is 805.8 billion US dollars (a weekly decrease of 10.27 billion US dollars), while overnight reverse repurchase (ONRRP) usage continued to decrease to 840 million US dollars (a weekly decrease of 650 million US dollars). Risk warnings: Economic data and policies falling below expectations, unexpected tightening of overseas policies.