The China Hang Seng Index ETF attracted a net inflow of nearly HK$6.7 billion on October 3. Mainlanders are celebrating the National Day holiday and may not have noticed the development. The Hong Kong Stock Exchange-listed China Hang Seng Index ETF received a large net subscription of funds on October 3. Despite the sharp decline in the market, its net worth soared from HK$760 million on September 29 to HK$7.44 billion, with a net inflow of nearly HK$6.7 billion. This is the largest institutional investor subscription in Hong Kong in nearly a decade. According to Huaxia Fund Hong Kong, the funding came from a leading MPF institutional investor in Hong Kong. Are the leading MPF institutional investors in Hong Kong AIA MPF, Principal MPF, Dividend MPF, Sun Life MPF or Chinese Life? No matter which one, the significance of this action is very significant.
The funds come from Hong Kong's compulsory provident fund system, which acts as the mainland's social security fund. According to the 2022~2023 annual report report released by the Hong Kong Provident Fund Council on July 30, as of the end of March this year, the total net assets of the MPF were HK$1,110 billion, of which HK$851 billion was net contributions, accounting for 77%. Since the establishment of the MPF system, the Hong Kong MPF has earned HK$258 billion for contributors, providing an important guarantee for Hong Kong residents' pension.
The Hong Kong MPFA has repeatedly emphasised that MPF is a long-term investment that achieves an average annualised internal net return of 2.5% through regular fixed investments. Below 16,000 points, it is half lower than the peak, and the market is full of mourning. MPF performed dismally, with an overall loss of more than $200 billion. Wrote the worst record since the 2008 global financial tsunami, with a per capita loss of more than 60,000 yuan.
After November last year, Hong Kong entered the road of normalcy, the stock market quickly recovered, and the MPF stopped falling and rebounded. In 2022, Hong Kong stocks fell by 15.5% and MPF fell by 15.66%. The current HSI 12-month forward PE section.
Since 2013, the historical quantile value has been about 2%, and the Hang Seng Index is at 7% of the historical quantile value relative to the MSCI World Index PE. In this extremely low valuation position, the confidence of Hong Kong people is still there, and everyone is looking forward to the rebound of Hong Kong stocks.
