Hong Kong stocks may be the best "shelter" in the world in the second half of the year

In recent times, the US stock market has plummeted. Data statistics have fallen by nearly 20%since the beginning of the year, and the Nasdaq index fell more than 27%. Investors are worried about the decline in the United States and offset the optimistic emotions brought by the United States to reduce inflation. Consumer prices in the United States are far from top, and the inflation rate has soared to 8.6%in May.

This disappears, the decline in the United States is expected to be high, and China is stabilizing and rebounding. It is foreseeable that the Sino-US cycle will be relatively large in the future. China's growth/inflation/credit/policy will be in the upward recovery period in the next 1-2 quarters, and the United States is in a gradual falling stage.

In this context, the risk aversion of the global market is strong. At this time, Hong Kong stocks supported by Chinese assets support at the bottom have become a good choice.

Figure: Internal and external economic policies in the second half of the year and switching in the first half of the year, this elimination (US decline) and the long -term (Chinese recovery)

Data source: Wind, Guangfa Securities Development Research Center

[Seeing the risk aversion attributes of Hong Kong stocks from Russia and Hong Kong]

Now, whether it is U.S. debt, US stocks, or US dollars itself, it has accumulated too many risks. Now we are for everyone a new option. Russia comes first.

Starting in May, the Hong Kong HKMA has begun plans to be kicked out of the Swift. Starting from June 20, Russia opened the Hong Kong stock transaction on the St. Petersburg Exchange of Russia, Russia, and the first batch of 12 stocks. The relevant list will be planned to expand in the future, and it will increase to 200 at the end of the year, and it will reach 1,000 in 2023. In the past, a large number of foreign exchange assets obtained by Russia's sale resources will be invested in Britain and the United States. After the Russian -Ukraine conflict, this part of the capital investment needs to be adjusted, and the Hong Kong stock market has become the first choice.

Russia and Hong Kong are just a signal. It is undeniable that the global concerns about overseas asset security are now loud. Comprehensive foreign media reported on July 6 that British Foreign Minister Traz recently said that Britain hopes to follow the assets of Canada and confiscate Russians in Britain in order to hand it over to Ukraine. Coincidentally, Li Ka -shing also began to sell his assets he created in the UK and returned to Hong Kong for refuge. Standing at the moment, the geopolitical crisis is anxious, the European and American capital market crisis, high risk aversion, Hong Kong stocks have gradually become a better risk aversion harbor for people.

[Federal Reserve's interest rate hike -it is a crisis for Hong Kong stocks, but also an opportunity]

It is believed that investors will worry about the Federal Reserve ’s interest rate hikes, and the liquidity status of the Hong Kong stock market may be affected. However, reviewing the flow of overseas public funds in the past few years, we noticed that the previous interest rate hikes may not cause large -scale capital outflows. If the steady growth policy can be implemented more effective and the domestic fundamentals will be improved, the Hong Kong stock market may get a positive response from overseas funds faster.

Conversely, in the history of re -enrollment, in the Federal Reserve's interest rate hike cycle, Hong Kong stocks generally perform well. On the one hand, Hong Kong stocks use the Hong Kong dollar price and linked to the US dollar, which will benefit from the appreciation of the US dollar. On the other hand, because the underlying assets of Hong Kong stocks are Chinese enterprises, the response of China's economic toughness will provide support. Against the background of the global stock market due to the influence of the Federal Reserve's interest rate hike, Hong Kong stocks are expected to become a haven of global assets.

Figure: Historically, the Federal Reserve ’s interest rate hike cycle Hong Kong stock market performance

[Foreign capital concentration is optimistic about Chinese assets]

The well -known institution Morgan Chase raised the stock rating of many Chinese stocks in May. Some are raised to a neutral rating, and some are raised to super -match rating. The operation analysis of the rating of China stock stock rating from Morgan Chase has gradually become optimistic about Chinese assets. This is also an attitude of foreign capital, and believes that the uncertain factors of China's Internet industry will gradually decrease.

Picture: JPMorgan Chase looked at many Chinese stocks

[How to choose Hong Kong stocks]

From the above points, I believe that everyone has realized the need for the current allocation of Hong Kong stocks. Of course, Hong Kong stocks are mixed, and they are mainly institutional investors. Although ordinary investors' market experience in A shares is sufficient, it is difficult for the Hong Kong stock market to be as easy as before. If you are really interested in allocation of Hong Kong stocks, it is recommended that you choose the configuration index to worry and effort.

How should I choose so many indexes in Hong Kong stocks?

First of all, compared with the income of the main broad-base indexes of the Hong Kong stock market in the past 5 years, the Hong Kong Stock Connect 50 (30.98%) has a significant running to win the Hang Seng Index (-2.00%), the Hang Seng State-owned Enterprise Index (-19.64%), and the local shares of Hong Kong (9.52%). Essence It can be said that the Hong Kong Stock Connect has performed very dazzlingly in the past 5 years.

Figure: Comparison of the major broad base index in the Hong Kong stock market since 2017

Note: Data source Wind, as of 2022.6.21

What's even more rare is that the valuation of 50 Hong Kong Stock Connect is among the major broad -foundation indexes in the Hong Kong stock market. The current valuation of the Hong Kong Stock Connect 50 is the lowest in history, which is simply the valuation floor price. In other words, standing at the moment, the cost performance of 50 Hong Kong Stock Connect is very cost -effective.

Figure: Comparison of the valuation points of the main broad -foundation index in the Hong Kong stock market

Note: Data source Wind, as of 2022.7.6

- END -