The Hang Seng Index opened 0.87% higher, and the Hang Seng TECH Index rose 1.23%. NIO surged nearly 9%, Baidu rose over 3%, NetEase and Xpeng Cars both gained over 2%, YANKUANG ENERGY rose over 4%, and CH ENERGY ENG increased over 3%.
Regarding the outlook for Hong Kong stocks,
Sinolink Securities stated that looking ahead to the second half of the year, we remain bullish on the overall direction of the Hong Kong stock market, with a ‘structural’ bull market showing considerable resilience. The renminbi and southbound capital flows remain the strongest supports for the Hong Kong stock market. The long-term narrative of a weaker US dollar is underpinned by the restructuring of the international landscape and the erosion of dollar credit due to unsustainable debt cycles. As the economic impact of the previous fiscal cycle gradually wanes, it has become a fact that key indicators such as American employment and consumption are weakening, while the new fiscal cycle is still in its early stages, with uncertainties regarding its pace and lagging economic effects. In the long term, the Hong Kong stock market anticipates the ‘third round of revaluation’ of renminbi assets.
Industrial Securities proposes that the bull market in Hong Kong stocks has entered a ‘long summer,’ benefiting from national empowerment, enhanced status as an international financial center, and incremental capital inflow, and will continue to strengthen in the second half of the year.
HTSC believes that the Hong Kong stock market may continue to experience high volatility in the third quarter, but the pressure factors are expected to be lower than anticipated, and the market upturn may start earlier. Under the new round of tariff negotiations, China’s relative advantage has actually increased; with multiple factors such as American financial deregulation, continued Federal Reserve rate cuts, stablecoin expansion, and adjustments in treasury bond durations, the USD index has further room to decline, which is bullish for the Hong Kong stock market. Internally, there have been positive changes in policies aimed at reducing internal competition, easing pressures on Internet E-commerce, and in the Real Estate sector.
China International Capital Corporation points out that the long-term macro factors supporting the capital flows into Hong Kong stocks have not changed, and the situation of abundant funds but limited high-quality assets may continue. However, in terms of timing, the third quarter faces multiple pressures of tightening liquidity, including the possibility of the Hong Kong Monetary Authority continuing to withdraw liquidity, a tighter external USD environment, and ongoing IPOs and placements, which could cause some disruption.
China Galaxy Securities states that among global equity markets, the absolute valuation of Hong Kong stocks is at a relatively low level, and the valuation percentile is at a historically high level.
Bosera Funds notes that the strong performance of the Hong Kong stock market in the first half of this year was a result of the resonance between fundamentals and capital flows, with both domestic and foreign investors forming a bullish consensus on Chinese assets. For the second half of the year, they remain bullish on the Hong Kong stock market, expecting numerous structural opportunities to be explored.
China Galaxy Securities points out that, looking ahead, it is expected that the overall trend of the Hong Kong stock market will be upward with a focus on structural performance. In the global equity markets, the absolute valuation of the Hong Kong stock market is at a relatively low level, with its valuation percentile in the middle to upper range historically.
Guoyuan Hong Kong analysis indicates that the current sentiment in the Hong Kong stock market is relatively positive. Since the beginning of the year, there has been a continuous inflow of southbound capital, and so far, there has been no significant sign of outflow, leading to a substantial accumulation of funds in the Hong Kong market. From a medium- to long-term perspective, although recent high-level meetings in China have indicated a low likelihood of more-than-expected easing policies in the short term, to counteract the impact of tariffs, relevant policies may still be introduced in the second half of the year when economic momentum weakens. The expectation of policy support can still underpin the valuations in the Hong Kong stock market, which is expected to maintain resilience over the medium to long term.
This article is reprinted from ‘Tencent Watchlist’, edited by Li Fo.
