Industrial: Who is buying Hong Kong stocks?

Industrial released a research report stating that, based on the net inflow of four types of capital, southbound funds have been the main force in increasing holdings in Hong Kong stocks since July, while foreign capital has seen a significant return since mid-July. Since July (up to August 5), the net inflow for southbound funds/international intermediaries/Chinese intermediaries/Hong Kong local funds was 75.1 billion / 6.9 billion / -30.9 billion / -8.1 billion Hong Kong dollars respectively, with southbound funds being the primary force in increasing positions in Hong Kong stocks. Meanwhile, foreign capital has started to flow back since mid-July, with a cumulative net inflow exceeding 60 billion Hong Kong dollars since July 16, gradually shifting from previously passive position replenishment to a resonance of active and passive capital increasing holdings. The main viewpoints from Industrial are as follows: Since July, Hong Kong stocks have become an important direction for global capital rebalancing. Here is a breakdown of the inflow structure for reference: Based on the net inflow of four types of capital, southbound funds have been the main force in increasing holdings in Hong Kong stocks since July, while foreign capital has seen a significant return since mid-July. Since July (up to August 5), the net inflow for southbound funds/international intermediaries/Chinese intermediaries/Hong Kong local funds was 75.1 billion / 6.9 billion / -30.9 billion / -8.1 billion Hong Kong dollars respectively, with southbound funds being the primary force in increasing positions in Hong Kong stocks. Meanwhile, foreign capital has started to flow back since mid-July, with a cumulative net inflow exceeding 60 billion Hong Kong dollars since July 16, gradually shifting from previously passive position replenishment to a resonance of active and passive capital increasing holdings. By primary sector: Southbound funds have mainly increased holdings in technology, materials, and pharmaceuticals, while reducing holdings in finance and industrials; foreign capital has mainly increased holdings in finance, discretionary consumption, and industrials, while reducing holdings in technology, materials, and pharmaceuticals. By secondary sector: Southbound funds have primarily increased holdings in software, non-ferrous metals, semiconductors, pharmaceuticals, and specialty retail, while reducing holdings in insurance, information technology equipment, and industrial engineering; foreign capital has mainly increased holdings in banks, information technology equipment, insurance, specialty retail, and industrial engineering, while reducing holdings in software, semiconductors, non-ferrous metals, and pharmaceuticals. In terms of important sector inflow rhythms: domestic funds increased holdings in major sectors in early to mid-July, but inflows began to slow down and turn into net outflows in late July. The internet and high dividends have been two important directions for foreign capital inflows since mid to late July. For Hong Kong stocks in the internet sector: in early to mid-July, domestic capital increased holdings while foreign capital reduced; in late July, domestic capital began to reduce holdings while foreign capital significantly increased; since August, both domestic and foreign capital have shown resonance net inflows, raising the slope of the market. For Hong Kong innovative pharmaceuticals: in July, domestic capital was the main force in increasing holdings, while foreign capital generally took profits; since the end of July, domestic capital turned to net outflows while foreign capital began to net inflow. For Hong Kong high dividend stocks: domestic capital saw significant net inflows in early to mid-July and began net outflows after the global risk appetite increased at the end of July; foreign capital has continuously net inflow significantly since mid-July. Regarding individual stocks: Southbound funds: In the past 20 days, the main inflows were into major model factories (Z.AI), major internet companies (NTES, Alibaba, Kuaishou), semiconductors (ILUVATAR COREX, GigaDevice Semiconductor Inc.), non-ferrous metals (CHINAHONGQIAO, Zijin), and AI healthcare (INSILICO). The major outflows were from PCB (KB LAMINATES), major internet companies (Tencent), semiconductors (SMIC), optical cables (Changfei), and high dividend stocks (Sinopec, China Life, ICBC). Foreign capital: In the past 20 days, the main inflows were into major internet companies (Tencent, Meituan, Xiaomi), banks (CCB, ICBC), Zhongji Innolight (Goldman Sachs, JP Morgan announced significant stake increases), BYD Company Limited, etc. The major outflows were from model factories, major internet companies (Alibaba), semiconductors, and non-ferrous metals (Zijin). Risk warning This is only a compilation of public information and does not involve research opinions or investment advice.