Haitong International: Alibaba-W received HKD 22 billion inflow from southbound funds last week, expected to maintain fluctuations in Hong Kong stocks

According to Zhitong Finance APP, Haitong International recently released a research report stating that earlier the bank believed that the A-shares would consolidate and digest previous gains entering September, while the Hong Kong stock market is expected to receive a short-term boost under the support of easing liquidity pressures and a strengthening RMB. Last week, A-shares experienced significant fluctuations, with the Shanghai Composite Index rising 1.5% for the week, and the ChiNext Index continuing to show large volatility, rising 2.1%; the Hong Kong stock market rebounded last week, driven by the surge in AI stocks in the US, with the Hang Seng Index rising 3.8% and the Hang Seng Tech Index rising 5.3%.

After Jerome Powell released dovish signals at the Jackson Hole meeting, a new round of gold price increases began, with London gold rebounding over 9% cumulatively; however, this week, US inflation data further confirmed interest rate cut expectations, causing gold prices to fluctuate. The US dollar index maintained a narrow range during the same period, still holding above the July low; emerging markets and Hong Kong stocks began to rebound since September 5. In the context where interest rate cuts have been fully priced in by the market, if the Federal Reserve cuts rates by 25 basis points on September 17, it may trigger profit-taking, putting pressure on gold and emerging markets, while the dollar is expected to rebound; if a larger-than-expected cut of 50 basis points occurs, the current bullish trend is likely to continue.

A-shares technology stocks experienced high volatility last week, and with the relaxation of purchase and loan restrictions in Shenzhen on September 5, all four first-tier cities have fully relaxed, boosting real estate sentiment, but consumer real estate is still building momentum, and subsequent policies may act as a breakthrough catalyst. Last week, liquidity in the Hong Kong stock market remained stable, and the momentum of sentiment uplift continued, but close attention should still be paid to exchange rate trends.

The sentiment uplift continues: Alibaba surged again with its self-developed chips and the next-generation Qwen3 model, as risk appetite continues to warm.

Liquidity remains stable: HIBOR remained stable this week; driven by interest rate cut expectations, the RMB appreciated moderately against the US dollar; however, if the dollar rebounds later, the exchange rate support for Hong Kong stocks may weaken. Last week, the AH premium index adjusted with 22 new groups added and 5 groups of AH stocks removed, with the premium significantly falling back to about 120, and it may tend toward normalization. Southbound funds saw a significant net inflow of HKD 60.8 billion last week, with Alibaba-W (09988) continuing to attract HKD 22 billion in inflows, totaling a significant inflow of HKD 37 billion since September.

In summary, US tech stocks surged driven by third-quarter earnings reports, with the Nasdaq reaching new highs, and the market has fully priced in three interest rate cuts this year, leading to a strong rebound in A-share technology stocks, while the Hong Kong stock market rebounded under the pull of Alibaba and Baidu Group-SW (09888). However, with the phase of US tech earnings reports coming to an end and US-China trade frictions resurfacing, liquidity in A-shares and Hong Kong stocks is unlikely to improve significantly in the short term, and the September market is likely to remain volatile. In terms of sectors, it is still recommended to accumulate large-cap blue chips on dips, with a focus on consumer real estate, anti-involution, and non-bank financial sectors