Zhixin Finance APP learned that HuaTai Securities released a research report stating that the Hong Kong stock market rose briefly last week before falling back. Active foreign capital outflows were a major drag on the capital side, but there were also positive signs: 1) Foreign capital: Passive foreign capital turned into a net inflow, driving the overall net inflow of the allocation market in Hong Kong, and the estimated net outflow scale of the trading market narrowed, and the allocation market and trading market differentiated or converged; 2) Southbound: The net inflow of Southbound capital is still at a high level, continuing the "dumbbell" incremental characteristic. The Hong Kong stock dividend ETF subscription of the Southbound has attracted a significant net inflow of funds, reflecting that Hong Kong stock dividends still have attractive to mainland investors. 3) Industry capital: Last week's stock buyback amount hit a new high for a single week since 2010, and the ratio of buyback market value rose to the second-highest level of the year, continuing to provide toughness to the Hong Kong stock market capital side; 4) After the previous adjustment, multiple indicators show that the trading sentiment of the Hong Kong stock market has cooled down sufficiently and there are signs of stabilization. The Hang Seng Index short selling ratio has fallen slightly to 14.9%, and the transaction amount and its proportion of warrants have bottomed out and rebounded.

Here are the main points of HuaTai Securities:

Foreign investment trends: Active foreign capital outflow, but overall allocation market and trading market differentiation or convergence.

From June 13 to June 19, according to EPFR's statistics, allocation-oriented foreign capital turned into a net inflow of Chinese equity assets, among which the net inflow size of ADR expanded, and the net outflow size of Hong Kong stocks turned into a net inflow, and the net outflow size of A-shares narrowed. Allocation market, active foreign capital net outflow Hong Kong stocks/ADR, consistent with the recent market weakness. The net outflow scale of active foreign capital from Hong Kong stocks expanded to USD 312 million (compared with a net outflow of USD 92 million the previous week), but passive foreign capital turned into a net inflow of USD 376 million (compared with a net outflow of USD 164 million the previous week), driving the allocation market to turn into a net inflow of Hong Kong stocks; trading market, the estimated net outflow of trading-oriented foreign capital has narrowed to USD 1.538 billion (compared with a net outflow of USD 7.831 billion the previous week). Although there may be certain errors in the above estimations, the allocation market and trading market differentiate or converge gradually.

Southbound capital: Hong Kong stock dividend ETF subscription, Southbound continues the "dumbbell" incremental characteristic of adding positions to Hong Kong stocks.

Last week, Southbound capital had a net inflow of RMB 22.25 billion, a decrease of RMB 2.58 billion from the previous week, but still at a relatively high level. The AH premium ratio fell slightly to 139.1, which is close to the central value of the reasonable fluctuation range (137-143) calculated, and corresponding to subsequent Southbound capital or still support; food and beverage/non-bank/steel/bank and other AH premiums are at a high level. Banks (RMB 5.57 billion), petroleum and petrochemicals (RMB 2.26 billion), electronics (RMB 1.97 billion) had the largest net inflows, while textile clothing (RMB -490 million) and commercial retail (RMB -30 million) had the largest net outflows. Recently, Southbound funds continued their "dumbbell" incremental characteristic, flowing into Hong Kong stock dividends and new economy sectors represented by automobiles/communications/electronics. The state-owned enterprise dividend ETF of the three Hong Kong stock connections was announced by China New Investment, with the Southbound capital net inflow of RMB 2.19 billion on that day and RMB 6.95 billion the next day respectively.

Industry capital: Buybacks hit a new single-week high since 2010.

Last week's buyback heat of the Hong Kong stock market hit a new high, and industrial capital continued to provide toughness for the capital side of the Hong Kong stock market: 236 cases of buybacks were recorded last week, an increase of 36 from the previous week; buyback amount of HKD 9.48 billion, an increase of HKD 910 million from the previous week, reaching a new single-week high since 2010; buyback market value ratio rose to 0.0173, the second-highest peak of the year. From the industry dimension, software and services (HKD 5.2 billion), retail trade (HKD 2.08 billion), banks (HKD 1.27 billion), etc. had the largest buyback amounts in the Wind secondary industry of the Hong Kong stock market last week; On a weekly basis, the software and services, banks, medicine and other buyback amounts have increased. At the individual stock level, the top 10 stocks in buyback amount were Tencent Holdings, Meituan-W, HSBC Holdings, AIA, Kuaishou-W, Hang Seng Bank, CSPC Pharma, CK Asset, Xiaomi-W, and Skyworth Group.

Sentiment tracking: Multiple indicators show signs of stabilization in trading sentiment after a sufficient cooling down.

1) Valuation and risk premium: As of 6.21, the Hang Seng Index risk premium has fallen slightly, but still remains above the rolling 5-year average by 1x standard deviation, and from a PB-ROE perspective, it is still cost-effective compared to other major stock indices worldwide. 2) Short positions: Last week, the Hang Seng Index short ratio fell slightly to 14.9%, with Hong Kong Internet stocks' short ratio being flat on a month-on-month basis, and Hong Kong real estate fell slightly by 0.016% compared to the previous month and has been at a high point since 2014. 3) The Hang Seng Index put-call ratio for options rose further last week to 1.15, approaching last year's peak, perhaps indicating that trading sentiment has cooled significantly. 4) Warrant turnover: Hong Kong derivative warrant turnover fell slightly to HKD 4.16 billion on a month-on-month basis last week, while the warrant turnover ratio to the total turnover of the main board increased slightly to 3.9%; it has rebounded from the bottom in recent periods but is still at its lowest level since 2010.

Risk warning:

The estimation model fails due to errors in data statistics.