Recently, the overall performance of Hong Kong stocks has been sharp, with the market paying particular attention to the movements of foreign capital. According to the data disclosed by HKEX today, JPMorgan Chase & Co. continued to significantly increase its holdings in stocks including BYD Company, HKEX, etc. on September 27th (Note: HKEX trading data is published with a 3-day delay), with the total amount of holdings in these 4 stocks exceeding 4.1 billion Hong Kong dollars.

The time when JPMorgan Chase & Co. increased its holdings coincided with the second day of the Central Political Bureau meeting. On September 26th, the Central Political Bureau of the CPC held a meeting to analyze and research the current economic situation and deploy the next steps in economic work. Prior to September 27th, the Hang Seng Index had been continuously strengthening, with a cumulative increase of over 15% in 10 trading days.

As one of the largest financial service institutions in the USA, JPMorgan Chase & Co. Holdings' position adjustment activities, in addition to its proprietary trading, also involve many operations acting as intermediaries for clients, with the majority typically being foreign capital. It can be said to represent the trends of some foreign capital.

The main individual stocks that JPMorgan Chase & Co. increased its holdings in on September 27th include:

$BYD COMPANY (01211.HK)$: Approximately 6.52 million shares of H shares were increased, with an average fill price of 274.5244 Hong Kong dollars, involving around 1.791 billion Hong Kong dollars. Subsequently, JPMorgan Chase & Co.'s shareholding ratio increased from 4.85% to 5.45%.

$HKEX (00388.HK)$ At an average price of HKD 296.4760 per share, increasing holdings by approximately 6.1164 million shares, involving approximately HKD 1.813 billion. After the increase, JPMorgan Chase & Co.'s latest holding is approximately 81.42 million shares, with a holding ratio increasing from 5.93% to 6.42%.

$CPIC (02601.HK)$At an average price of HKD 26.2491 per share, increasing holdings by approximately 10.14 million shares, involving approximately HKD 0.267 billion. JPMorgan Chase & Co.'s holding ratio increased from 6.98% to 7.35%.

$TSINGTAO BREW (00168.HK)$At an average price of HKD 55.4166 per share, increasing holdings by approximately 4.375 million H shares, involving approximately HKD 0.242 billion. After the increase, JPMorgan Chase & Co.'s latest holding ratio increased from 7.60% to 8.27%.

On the previous trading day, September 26, JPMorgan Chase & Co. already increased holdings.$PING AN (02318.HK)$H-share 39.861682 million shares, spending approximately 1.771 billion Hong Kong dollars, and the shareholding ratio increased to 8.28%.

Institutions such as JPMorgan Chase & Co. closely monitor the capital flow of the Chinese stock market.

JPMorgan Chase published a research report on the A-share market on October 2, indicating that the unexpected call for strong policy stimulus at the political meeting led to a strong rebound in A-shares. This round of rebound was driven by three factors: a decrease in short sell ratio, an increase in margin trading, and investors' excitement. Specifically, as of September 30, the short sell ratio in the Hong Kong market decreased from 21.8% on September 16 to 10.2%; the proportion of margin trading in A-shares as a percentage of total trading volume increased from 7.4% on September 20 to 10.5% on September 27. JPMorgan Chase believes that the excitement of retail investors and the surge in new account openings are evidence that the exposure of global funds to the Chinese stock market may be narrowing. JPMorgan Chase also predicts that from September 23 to 27, the net inflow of A-share ETF funds was 59.3 billion yuan (approximately 8.5 billion US dollars). JPMorgan Chase points out that the sustainability of the A-share rebound depends on the strength of fiscal policies, macroeconomic data, and profit adjustments.

Yan Zhaojun, a strategist at Zhongtai International, stated on October 2 to Caixin that Hong Kong's sharp rise that day perfectly reflected the characteristics of foreign and local funds in Hong Kong entering the market successively due to the fear of missing out. This marks the return of foreign funds that had significantly underweighted Hong Kong stocks previously, as well as the reversal of trading the seven sisters 'Mag 7' which includes buying Japanese stocks, Indian stocks, and US stocks, and short selling in China. The situation is similar to the sharp rise in the Japanese yen caused by the reversal of yen carry trades in early August, except that this time it is happening in the Chinese stock market.

Macro research team at Huafu Securities released a research report on October 2, indicating that from recent marginal changes, overseas funds in the Hong Kong stock market have started to turn net inflows since September, with international intermediary institutions' net inflows reaching 39.6 billion Hong Kong dollars since the second half of the month, surpassing the net inflow of Southbound funds by 20.5 billion Hong Kong dollars. The current trend of the Hong Kong stock market is still in progress, and there is still room for further upside. Structurally, if international intermediary funds continue to flow back into the Hong Kong stock market in the future, growth sectors represented by the Heng Seng Technology Index are expected to continue to outperform.

From a data perspective, analysts' forecasts and research have been further validated, let's continue to pay attention to the next moves of foreign funds.

Editor/Somer