What is the impact of China’s asset counterattack? "A promise" has triggered a 5 trillion hot track. Can the rebound be sustained?

Tickmill Group

According to Sing Tao Daily, Li Weihong, a member of the financial services sector of the Hong Kong Legislative Council, said that the industry is highly concerned about the weakening liquidity of the Hong Kong stock market and has established a task force to promote stock market liquidity to comprehensively examine the main internal and external factors affecting the liquidity of the stock market. It also proposed that short, medium and long-term measures should be taken to enhance competitiveness and accelerate development. He mentioned that members of the task force are carefully and objectively paying attention to the challenges facing the Hong Kong stock market, and have put forward various suggestions to promote stock market liquidity around listing reforms, transaction costs, and trading mechanisms. It is expected that short-term stimulus measures will be released soon. .

At the same time, despite the sharp fall overnight, A-shares still emerged from the independent market. Today, the A-share market stopped falling and rose sharply, and the RMB also rose sharply. This may be related to expectations in various aspects. On the one hand, "rumors about refinancing and quantitative fund supervision" have continued to ferment in the past two trading days; on the other hand, the key variables affecting the recent market may have changed "for the better." It has also been at a relatively critical time recently, and the bulls' care for the market has also attracted much attention. In addition, news from Bloomberg pointed out that China is considering relaxing the cap on foreign ownership of some A-shares, but the discussion is still at an early stage. However, this news has not been officially confirmed.

From the perspective of A-share structure, the leading sector is mainly artificial intelligence. This sector with a market value of more than 5 trillion is led by Kunlun Technology, and Kunlun Technology's surge is related to its major shareholder's promise to "not reduce its holdings in three years." .

The Hong Kong stock market has received major positive news

Today, the performance of the Hong Kong stock market is surprising. Because U.S. stocks fell sharply overnight, the Fed's interest rate direction is very unoptimistic. However, the Hong Kong stock market, which has always followed the trend of the outside world, experienced a sharp rise today. The Hang Seng Technology Index once rose by nearly 3%. The increase later narrowed slightly, but the increase was still very impressive.

The reason why the Hong Kong stock market performed like this may be related to a piece of news.

Yesterday, Hong Kong Chief Executive Lee Ka-chiu said at the National Day reception of the financial services community that recently, the Task Force on Promoting Stock Market Liquidity is intensifying its meetings to conduct in-depth studies on measures to promote market liquidity and will submit a recommendation report to it. I believe there are many " "Good bridge" (good idea), the financial sector is no exception. We look forward to people from the financial sector putting forward more "good bridge" suggestions to the task force for the group to brainstorm.

The words of another congressman shocked the market even more. In recent years, complex geopolitics, a high interest rate environment and three years of epidemics have seen a decrease in the number of IPOs, fund raising amounts and market trading volume. Li Weihong, a member of the financial services sector of the Legislative Council, said in a speech at the same occasion that the industry is highly concerned about the weakening liquidity of Hong Kong stocks. To solve the problem, a task force for promoting stock market liquidity was established to comprehensively examine the main internal and external factors affecting the liquidity of the stock market, and proposed to enhance competitiveness and accelerate development through short, medium and long-term measures. He mentioned that members of the task force are carefully and objectively paying attention to the challenges facing the Hong Kong stock market, and have put forward various suggestions to promote stock market liquidity around listing reforms, transaction costs, and trading mechanisms. It is expected that short-term stimulus measures will be released soon. .

In fact, the Hong Kong market has shown resilience in recent times. According to data from Haitong International, Hong Kong stock Hang Seng Technology's gains have led major global markets since June, with Internet and high-dividend assets rising in rotation. In October 2022, Hong Kong stocks bottomed out and rebounded, but after February 2023, Hong Kong stocks corrected again. Since June, Hong Kong stocks have begun to stabilize. Among them, the Hang Seng Technology Index has begun to rise significantly, causing investors to pay attention to whether the Hong Kong stock market has returned to an upward trend.

Haitong International believes that the improvement in China's economy and Hong Kong stock fundamentals are expected to be the main reasons why Hong Kong stocks have been stronger than A-shares recently. The 10-year China Bond interest rate has begun to bottom out since June, reflecting that pessimistic expectations for the economy have begun to gradually turn. During this period, the Hang Seng Technology/CSI 300 and the 10-year China Bond interest rate have gradually become positively correlated, especially in August. Strong positive correlation. At the same time, according to Bloomberg data, the consensus EPS forecast of the Hang Seng Index has bottomed out since July, and the consensus EPS forecast of the Hang Seng Technology Index has begun to be revised upward. It can be seen that the recent improvement in profit expectations of Hong Kong stocks is supporting the better performance of Hong Kong stocks. Tickmill Group

The external environment for artificial intelligence has not changed much. Nvidia even fell sharply last night. Therefore, today's performance of artificial intelligence is entirely caused by internal factors, and this internal factor is actually an announcement promising not to reduce holdings.

Last night, Kunlun Wanwei issued an announcement stating that Zhou Yahui, as the controlling shareholder of Kunlun Wanwei, has a high degree of recognition and long-term optimism for the AI industry and the company's development strategy. At the same time, in order to encourage the board of directors and management team to pay more attention to and achieve the company's long-term strategic goals, Zhou Yahui And Yingrui Century, a person acting in concert, promises not to reduce its holdings of the company's shares in any form in the next three years (from September 22, 2023 to September 21, 2026), including that part of the shares due to capital reserves during the commitment period. New shares resulting from matters such as transfer of shares, distribution of stock dividends, allotment of shares, additional issuance, etc. This announcement directly led to the sharp rise of Kunlun Wanwei.

The company is also making continuous efforts in artificial intelligence. On August 23, Kunlun Wanwei released Tiangong AI Search, China’s first search engine that incorporates a large language model. This is another important exploration of Kunlun Wanwei in this field since the release of the "Tiangong" large model on April 17 this year.

Can the rebound be sustained?

The independent strength of A shares today is actually related to some expectations. In the past two trading days, the market has continued to circulate small articles "on securities refinancing and supervision of quantitative funds". In addition, there is also some news about stabilization funds, coupled with the bullish efforts at critical moments and recent key variables. The improvement may be the main reason why the market stabilizes and rebounds.

So, how sustainable will the rebound be?

Analysts believe that from the perspective of the direction of U.S. interest rates, the international financial environment is still relatively severe because the United States has released expectations that "it may raise interest rates once more this year and will maintain high interest rates for a long time to come." Against this background, it will be more difficult for emerging markets to continue to improve, but there is also an opportunity for change. In November this year, the APEC meeting will be held in the United States. If the major countries can reach some agreements to allow the dollar to flow back to emerging markets, there will be a real big opportunity.

From a domestic perspective, the market still needs the care of sustainable liquidity. If similar expectations can be released, market expectations will also undergo a fundamental change, and this is also the key to the international financial game. In the coming week, we face a long holiday. According to past practice, before this, many funds will take some risk-taking actions, so trading volume may shrink.

But there is no definite answer as to whether to hold stocks or currency. Tickmill Group