China Merchants Securities: What are the recent micro liquidity problems in Hong Kong stocks?

The Zhitong Finance App learned that China Merchants Securities released a research report saying that the Hong Kong stock market has not stabilized after cutting interest rates overseas recently, mainly due to two internal liquidity issues: the implementation of new public fund benchmark regulations, which may lead to the sale of some Hong Kong stocks; Hong Kong stocks are in high demand for phased capital. Although the above narrative exists and continues to strengthen during the decline, the overall impact is limited.

The main views of China Merchants Securities are as follows:

Recommended industries and indices: Internet (930604.CSI), non-ferrous metals (931947.CSI), Hong Kong Stock Connect African Bank (931024.CSI).

Hong Kong stock market performance last week: Last week (12/08-12/12), the Hong Kong stock market rose less and fell more. Among the main indices, the Hang Seng Index fell 0.42%, Hang Seng Technology fell 0.43%, and the AH premium remained at 119.8. By sector, the major Hong Kong stock industries rose less and fell more last week. Only the finance and information technology sectors rose, while the energy industry led the decline.

Microfinance: First net outflow to the south in half a year, with net inflows of Hong Kong and foreign capital at the same time. 1) The total net outflow of capital to the south was HK$3.4 billion, mainly in the direction of non-essential consumption; 2) Net foreign capital purchases through ETFs was US$260 million, and the cumulative net inflow was close to the highest since 924; 3) Hong Kong's local ETFs also had a net inflow of HK$5.1 billion, with a total net inflow of HK$45.9 billion from the beginning of the year to date.

Changes in Hong Kong's liquidity: Interest rates in the Hong Kong market tend to be relaxed. The overnight Hibor rate is 1.71%, the 3-month Hibor interest rate is 3.03%, and the USD/HKD exchange rate is 7.78, gradually approaching the strong exchange guarantee.

Significant overseas liquidity changes: US 2-year Treasury interest rate 3.522% (down 36 bps); 10-year Treasury interest rate 4.182% (up 47 bps). The US Treasury General Account (TGA) balance was US$805.8 million (weekly decrease of US$10.27 billion), while overnight reverse repurchase (ONRRP) usage continued to drop to US$840 million (weekly decline of US$650 million).

Risk warning: Economic data and policies fell short of expectations, and overseas policies tightened beyond expectations.