What changes have occurred in the pricing power of Hong Kong stocks in the second quarter?
CITIC Securities pointed out that since the second quarter, southbound funds have continuously flowed into Hong Kong stocks, with a cumulative net inflow of HKD 292.5 billion. The proportion of southbound holdings reached a historical high, with the proportion of Hong Kong Stock Connect holdings increasing from 19.0% to 20.7%. The foreign capital proportion decreased from 62.8% to 60.4%. In several industries, the marginal pricing power of southbound funds has significantly increased, especially in consumer services, household goods, and automotive sectors
CITIC Securities stated that since the second quarter, southbound funds have continued to flow into Hong Kong stocks, with a cumulative net inflow of HKD 292.5 billion in Q2. The market value of southbound holdings in Hong Kong stocks has reached a historical high, with the proportion of Hong Kong Stock Connect holdings rising from 19.0% at the end of Q1 to 20.7% at the end of Q2. Meanwhile, the proportion of foreign capital decreased from 62.8% to 60.4%.
From an industry perspective, foreign capital still dominates most sub-sectors of Hong Kong stocks from a stock perspective. However, with the inflow of southbound funds, the marginal pricing power of southbound funds is significantly increasing in sectors such as consumer services, household goods, automobiles, commercial services, durable consumption, biopharmaceuticals, medical device services, energy, and banking.
