"Behind" Hang Seng Technology
Guotou Securities pointed out that the current level of the Hang Seng TECH Index is only half of its peak in 2021, indicating its relative lag. The yield difference with the ChiNext Index has reached 34 percentage points, close to the historical extreme level of 2021, suggesting that the relative returns of Hang Seng Technology may be poised for a reversal
Guotou Securities:
Using the 2021 peak as a reference, we calculate the required increase in the current core index's latest closing price to reach the 2021 peak. Currently, the Shanghai Composite Index has already surpassed the 2021 highest point, and the Wind All A and CSI Dividend have almost caught up to the 2021 peak, while the CSI 2000, representing small and micro-cap stocks, has significantly exceeded the 2021 peak. Currently, the one with the largest relative distance from the 2021 peak is the Hang Seng Technology, with the current level only half of the 2021 peak. (Figure 1)
Further comparing the Hang Seng Technology and the ChiNext Index, which also have the attributes of "institutional heavy positions" and "anti-barbell strategy," from the 60-day rolling yield difference, there is a clear alternating rotation relationship historically between the two. When the ChiNext Index's increase leads the Hang Seng Technology by more than 20 percentage points, it often indicates a reversal in the relative returns of the Hang Seng Technology (the extreme case was in 2021 when institutions were extremely clustered, leading to a yield difference expanding to over 30 percentage points). Currently, this yield difference has reached 34 percentage points, approaching the historical extreme level of 2021.
