According to the financial news app Zhixun, Huatai Securities released a research report stating that last week, Hong Kong stocks continued to adjust and the long and short struggles intensified, with foreign capital, southbound, and industrial capital continuing to pull. On the funding side: the scale of net outflow of active foreign investors has expanded, and the scale of net inflow of passive foreign investment has narrowed (previously heavily influenced by index adjustments), and the net outflow of allocation plate and trading plate has widened; the net inflow of southbound fund scale has converged, and the attraction of Hong Kong stock dividend assets to mainland funds is still strong; the repurchase volume and repurchase market value ratio last week reached a new high in a single week since 2010, and the repurchase enthusiasm for the Internet, finance (banking/insurance), medicine and other industries is relatively high; as Hong Kong stocks retreated to near the support level, the short-selling ratio of Hang Seng Index continued to fall slightly to 13.9%, the ratio of put-call options fell to 0.93, and the turnover and proportion of warrants bottomed out and rebounded, which may reflect the signs of stabilizing trading sentiment.

Foreign Capital Trends: The scale of net outflow of active foreign capital has expanded, and the net outflow of allocation plate and trading plate has widened.

From June 20th to 26th, the configuration-type foreign investment in EPFR caliber turned net outflow, with ADR and Hong Kong stocks turning net outflow. Allocation plate, active foreign capital net outflow of Hong Kong stocks/ADR, consistent with the market weakness in the interval, the net outflow of active foreign capital in Hong Kong stocks expanded to 331 million US dollars, compared with the net outflow of 312 million US dollars in the previous week, and the net inflow of passive foreign capital shrank to 227 million US dollars, compared with the net inflow of 376 million US dollars in the previous week, which was heavily influenced by index adjustments before; Trading plate, Huatai Securities estimated that the net outflow of trading-type foreign capital expanded to 2.811 billion US dollars (vs a net outflow of 1.538 billion US dollars in the previous week). Overall, the net outflow of allocation plate and trading plate has expanded, and the net outflow of trading plate is close to the level at the beginning of March.

Southbound Capital: the scale of net inflow has converged, and the attraction of Hong Kong stock dividend assets to mainland funds is still strong.

Last week, Southbound funds had a net inflow of 8.62 billion yuan, a decrease of 13.63 billion yuan from the previous week. The AH premium rose slightly to 141.3 compared with the previous period, which is in the reasonable fluctuation range (137-143) center slightly above, corresponding to the subsequent Southbound funds or still have support. From the industry dimension, the net inflow of southbound funds of banks/petrochemicals/electric power and public utilities ranks first, while the net outflow of consumer services/textile and clothing ranks first. From the perspective of individual stocks, the switching between Hong Kong stock dividends and the Internet is mainly focused, including China Mobile/Tencent/Bank of China/Yankuang Energy/China Shenhua with the highest net inflows, and Great Wall Motors/Traditional Chinese Medicine/Five Metals Resources/Huaneng Power with the highest net outflows. Hong Kong stock dividend assets are still attractive to mainland funds, and they play the role of 'safe haven' against the background of the recent weak market.

Industrial Capital: the repurchase amount and repurchase market value ratio reached a new high in a single week since 2010.

Last week, the repurchase enthusiasm reached a new high, and industrial capital is still an important support for the funding side: there were 276 repurchase cases, an increase of 40 from the previous week; the repurchase amount was HKD 10.57 billion, an increase of HKD 1.09 billion from the previous week, once again reaching a new high in a single week since 2010; the repurchase market value ratio rose to 0.0194 and also reached a new high in a single week since 2010. From the industry perspective, software and services/retail/trade/insurance/banking/technology hardware and equipment have the highest repurchase amount, and software and services/technology hardware and equipment/insurance/retail/medicine have the highest increase in repurchase amount; looking at the repurchase market value ratio, software and services/retail/trade/technology hardware and equipment/business and professional services/insurance/medicine have the highest repurchase market value ratio. In terms of individual stocks, the top 10 repurchase amounts are mainly concentrated in the Internet/finance/medicine, etc.

Emotional tracking: the short-selling ratio of Hang Seng Index, the put-call ratio of call options fell, and there were signs of stabilizing emotions.

1) Valuation and risk premium: As of June 28, the Hang Seng Index P/E ratio fell to 9.2x, and the risk premium remained relatively stable. From the perspective of PB-ROE, it still has cost-effectiveness among major stock indices around the world; 2) Short positions: Last week, the Hang Seng Index short ratio continued to fall slightly to 13.9%, with the Hong Kong internet-related stocks short ratio remaining stable on a month-on-month basis, while Hong Kong real estate rose slightly on a month-on-month basis but remained at a high level since 2014; 3) The put-call ratio of Hang Seng Index options fell to 0.93 last week, reflecting signs of stabilization in trading sentiment; 4) Turnover of warrants: Last week, the turnover of Hong Kong derivative warrants fell slightly to HKD 3.81 billion, and the proportion of total turnover on the main board increased slightly to 3.90%. It has rebounded from recent lows but remains at a low level since 2010.

Risk Warning: Ineffective estimation model; Incorrect data statistics.