The Zhitong Finance App learned that after the Chinese government announced strong measures to boost stock market liquidity and a basket of policies and measures to stimulate economic growth, the UK-based banking giant HSBC (HSBC) said that the bank's customers' Hong Kong stock trading activities have increased significantly, and the overall customer trading business has been fully boosted by the surge in Hong Kong stock popularity. Prior to that, Wall Street financial giants Goldman Sachs and Citibank released bullish research reports on the Hong Kong stock market. Goldman Sachs, which is called the “flag bearer of the bull market,” called the “bullish standard-bearer,” this round of “long-term bull market” in Hong Kong stocks is far from over. Citi boldly predicted that the Hang Seng Index is expected to hit 26,000 points in the middle of next year.

HSBC said on Tuesday that the “policy punch” announced by the Chinese government last month promoted “increased volatility” in the Hong Kong stock market at the end of the third quarter, thereby greatly boosting the size of customer wealth in the Hong Kong market, as well as customer trading activities in the stock and foreign exchange markets. HSBC stressed that the Chinese government's stimulus measures will continue to significantly boost Hong Kong stock market trading. The bullish stance of HSBC and Wall Street investment institutions on Hong Kong stocks may mean that Hong Kong stocks will usher in a new round of eruption after fluctuating sideways.

Fueled by global capital's enthusiasm for trading Hong Kong stocks in the third quarter, HSBC's newly announced profit for the third quarter, which regards Hong Kong as the largest market, exceeded general market expectations. This is HSBC's first performance under the leadership of new HSBC CEO Georges Elhedery (Georges Elhedery). The overall recovery in HSBC's business activity highlights signs that the world's second-largest economy is recovering, driven by the government's latest basket of stimulus measures.

Foreign investment enthusiasm for Hong Kong stocks continues to heat up

The Hong Kong stock market is generally the first gateway for foreign investment in China, and it is also the best entry point for foreign institutions such as Wall Street to invest in Chinese companies. More importantly, benefiting from the Federal Reserve's unexpected interest rate cut of 50 basis points to begin the interest rate cut cycle, and the liquidity support provided by domestic monetary stimulus policies, Hong Kong stocks can be described as having received a “double liquidity dividend between China and the US.”

Compared to China's A-share market, Hong Kong stocks benefit more from global liquidity easing expectations. After all, the Hong Kong stock market, which has no restrictions on foreign investment, can enjoy the huge liquidity stimulus brought about by domestic stimulus policies, the Federal Reserve's interest rate cut cycle, and even European interest rate cuts. Looking ahead to the future of Hong Kong stocks, a new round of bull market may be far from over under the continuing liquidity dividends and anticipated catalysts of policies such as domestic promotion fees, birth promotion, and private economic development policies.

iShares China Large-Cap ETF (FXI.US), is a popular ETF that focuses on Chinese assets listed on the NYSE. Currently, the overall size of the ETF has broken the 10 billion US dollar mark, highlighting that foreign capital's enthusiasm for investing in Chinese assets, especially Hong Kong stocks, continues to heat up. This is also the first time that an ETF in the Chinese stock ETF category listed on the US stock market has surpassed 10 billion dollars in size. Since this year, the ETF's value has increased by 34%, even outperforming the S&P 500 index.

According to information, the iShares China large-cap ETF fully focuses on the Hong Kong stock market, providing international investors with the main way to invest in China's top listed companies. The ETF covers the 50 stocks with the largest listed value and the best liquidity in the Hong Kong stock market. The most important stock in the iShares China large-cap ETF is Meituan, accounting for more than 10%, followed by Alibaba, Tencent, China Construction Bank, and JD. The top ten also includes Xiaomi, BYD, Ping An of China, Bank of China, and ICBC, which are the most popular stocks in the Hong Kong stock market.

“KWEB” KraneShares, an ETF provider that focuses on Chinese overseas listed internet companies, is optimistic about the future of Chinese assets. Brendan Ahern, chief investment officer at KraneShares, said that for a long time, Chinese stocks have been seriously underrepresented in global stock indices, and their stock valuations are generally low compared to similar global stocks. “The Federal Reserve is cutting interest rates, so why not invest some of the profits in more cost-effective Chinese assets?” Ahern said in an interview. “There are huge investment opportunities in the valuation.”

Wall Street financial giants led by Goldman Sachs, the “flag bearer of the bull market,” are optimistic about China's asset prospects

The government's large-scale stimulus plan triggered a new wave of foreign purchases and a fervent wave of raising investment ratings in the Chinese stock market. Some foreign-funded institutions, including global asset management giant BlackRock Inc. (BlackRock Inc.), which had long been short of the Chinese stock market (including Hong Kong stocks and A shares), also turned bullish, and these foreign-funded institutions used real money to push the Chinese stock market back sharply.

BlackRock, which has been cautious about the Chinese stock market for a long time, recently stated that it will upgrade the rating of Chinese stocks from “neutral” to “overvalued.” The agency believes that given that discounts in the Chinese stock market compared to developed market stocks are close to record levels, and there is a strong catalyst that may stimulate foreign investors to re-enter the market, there is still room for major institutions to moderately increase their holdings of Chinese stocks in the short term.

Wall Street financial giant Goldman Sachs, which has the title of “global stock market bullish market standard-bearer,” recently published a research report saying that it raised the rating of the Chinese stock market (including Hong Kong stocks and A shares) to “overrated” and raised the target point of the Shanghai and Shenzhen 300 Index from 4000 to 4600. The Shanghai and Shenzhen 300 Index closed at 3924.65 points on Tuesday. Goldman Sachs will also raise the target point of the MSCI China Index (MSCI China Index), which covers China's core assets such as Alibaba, Tencent, and Kweichow Moutai, from 66 to 84. In comparison, the MSCI China Index recently closed at 67.34 points. In terms of industry allocation, Goldman Sachs said that in view of increased capital market activity and improved asset performance, insurance and other finance (such as brokerage firms, exchanges, and investment institutions) were raised to “overallocated”; at the same time, Goldman Sachs maintained its “overallocation” position on China's Internet and entertainment, technology hardware and semiconductors, consumer retail and services, and daily necessities industries.

Another major Wall Street bank, Citigroup, recently published a research report stating that it will raise the target of the Hong Kong stock benchmark index, the Hang Seng Index, by 24% to 26,000 points and set the target for the end of 2025 at 28,000 points. In contrast, the Hang Seng Index closed at 20701.14 points on Tuesday. Citigroup raised the target points for the Shanghai and Shenzhen 300 and MSCI China Index for the first half of next year to 4,600 and 84 points respectively, while the target points by the end of next year were set at 4,900 and 90 points.

Bernstein (Bernstein), a well-known investment agency on Wall Street, recently reiterated the agency's “tactical position on increasing its holdings” on the Chinese stock market, and stated that with policy support, the Chinese stock market will rise further. The agency wrote in a recent research report released on Thursday: “A series of stimulus policies and fiscal stimulus measures recently introduced by the Chinese government have triggered strong bullish reactions from investors. Large amounts of international capital have poured into the Chinese stock market, and the scale of passive capital inflows from the US has also reached a record high. After the introduction of a series of policies, we turned optimistic and still believe that the risk return in the Chinese market is biased towards the upside.”

Bank of America strategist Lars Naeckter, who had previously correctly predicted a sharp rise in the Chinese stock market at the end of September, recently said that although the Hong Kong Hang Seng China Enterprises Index has taken back some of its gains in recent days, the market is still likely to rebound further considering the continued strength of national policies and the will of foreign institutions to re-enter the Hong Kong stock market. Naeckter's Bank of America team also recommended using a call option strategy for “Chinese large-cap ETFs” in the US stock market.

Macquarie (Macquarie), the world's top investment agency headquartered in Australia, recently released a report raising the stock ratings of many Chinese internet companies listed in the US and Hong Kong. The main reason is the increased visibility of corporate profits and the Chinese government's continued policy stimulus measures. Macquarie's analysis team pointed out in the research report that compared to the beginning of 2023, the current fundamentals of these internet companies are actually stronger, but the valuation level has always been only half of what it was at the beginning of 2023.

Macquarie upgraded Alibaba's and Pinduoduo's stock ratings from “neutral” to “outperforming the market,” and the agency also reiterated the “outperforming market” ratings for JD and Meituan. The agency's analysis team also anticipates that the Chinese government will take further actions to stimulate economic growth, particularly in the consumer and digital services sector, and it is expected that these Internet companies will continue to benefit from the policy.