On April 16, Ping An, a Hong Kong stock market, bottomed out at HK$29.70, and then turned back to the upside, rising all the way. From April 17 to yesterday, May 16, in just one month, a total of 20 trading days, Ping An of China rose by 44%. In the same period, the A-share Ping An rose by 12%.
If you count the rise of Ping An in the Hong Kong stock market today, the bottom of this round has come up, and in just 21 trading days, Ping An of China has risen by more than 50%, with a market value of more than 800 billion Hong Kong dollars. The resilience of large-cap white horse stocks amazed the market.
Ping An of China is just a microcosm, entering the second half of April, Hong Kong stocks rose significantly. Choice data shows that from April 22 to May 16, the Hang Seng Index has risen by 19.43%, and the Hang Seng Technology Index has risen by 24.22%. In the same period, the Shanghai Composite Index rose by only 1.86%. Why have Hong Kong stocks risen much more than A-shares recently?
The most fundamental reason is that the liquidity of Hong Kong stocks has improved. On the one hand, with the continuous depreciation of the yen exchange rate, the attractiveness of Japanese stocks has decreased significantly, and the focus of foreign investment in the Asia-Pacific region has shifted from Japan to Hong Kong stocks. At the same time, the Fed's interest rate cut expectations have been postponed, and the U.S. stock market has also seen a weak rise after the previous continuous gains, and the Hong Kong stock market is relatively more cost-effective.
On the other hand, mainland investors, including public offering institutions, have increased their participation in the Hong Kong stock market, which has also become an important source of liquidity for the Hong Kong stock market. Since March 2024, the inflow of southbound funds into the Hong Kong stock market has accelerated. In March and April, the net inflow of southbound funds exceeded 70 billion yuan.
In addition, since the beginning of the year, a series of policies aimed at improving cross-boundary connectivity have been implemented. and the market's expectation of dividend tax relief for Hong Kong stocks. All these factors have contributed to the continuous improvement of liquidity in the Hong Kong market.
The trend of Hong Kong stocks is very close to that of the Nasdaq Golden Dragon Index, which has risen by about 19% since April 17. In the U.S. stock market overnight, the Nasdaq China Golden Dragon Index closed up 2.49%, hitting a new high since September 2023. Alibaba closed up more than 7%, iQiyi rose more than 12%, and NetEase rose more than 5%.
Citron, the "Air Force Pioneer" who used to be famous for being an air concept stock, openly sang about Alibaba on social media. Citron said that Alibaba is gaining momentum, and investors will recognize its AI cloud prospects and strategic investments, and Citron believes that Alibaba's stock price is on track to rise above $100. Citron also said that Alibaba's model is the leader in China's large language model field, and the news has sent Alibaba's stock price soaring.
From being bearish on China at the beginning of the year to now being long on Chinese concept stocks, Wall Street's attitude has changed significantly. In addition to Citron, according to the U.S. Securities and Exchange Commission, Appaloosa Management, a top asset management institution founded and managed by David Tepper, a well-known U.S. billionaire investor and hedge fund legend, submitted a report on U.S. stock holdings for the first quarter ended March 31, 2024. According to the report, the top asset manager significantly reduced its holdings in these technology stocks that benefited from the AI investment frenzy in the first quarter of 2024 at an unexpectedly aggressive pace, but increased its position in Chinese concept stocks such as Alibaba and Pinduoduo with large amounts.
In addition, Michael Burry, the world-renowned hedge fund manager who has always been known for his short-selling style of the movie "The Big Short", also increased his position in Alibaba in the first quarter, and his Scion asset management company increased its stake in Alibaba by nearly 67% in the first quarter.
The strength of Chinese concept stocks and Hong Kong stocks is being passed on to A-shares. This afternoon, the A-share market out of the downturn for several days, stimulated by real estate news, driven by core asset stocks, the three major indexes all rose more than 1%, of which, Ping An of China rose 5%.
Author: Xu Jinhua
Editor: Zhang Tianyi
Producer: Gu Jie
Sources: Global Times, Phoenix.com, Shangguan, Finance Associated Press, etc
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