The Zhitong Finance App learned that Haitong Securities released a research report saying that Trump's victory in November suppressed Hong Kong stock liquidity and risk appetite. Hong Kong stocks declined, and at the same time, it will take time for domestic fundamentals to improve. The trend of Hong Kong stocks in this round is clearly ahead of A-shares. Hong Kong stocks bottomed out and rebounded first on August 5, and began a pullback on October 8. The bank believes that Hong Kong stocks are currently in a cost-effective range. In the future, domestic policies will strengthen or promote fundamental improvements, and there is plenty of room for Hong Kong stocks to rise.

Haitong Securities's main views are as follows:

Market review: The performance of major global stock indexes was divided in November, and Hong Kong stocks continued to adjust. On the A-share side: the cumulative gain/maximum increase of 0.7%/3.9% of the GEM index, the cumulative gain/maximum increase of 2.8%/6.8% in the GEM index; the cumulative decline/maximum decline of the Hong Kong stock side of the Hang Seng Index was -4.4%/-10.8%; the cumulative decline/maximum decline of the Hang Seng Technology Index was -3.2%/-13.4%; in other markets, the cumulative gain/maximum increase of the S&P 500 index was 5.7%/6.1%; in other markets, the cumulative gain/maximum increase of the German DAX was 2.2%/6.9%; in other markets, the cumulative gain/maximum increase of the German DAX was 2.2%/6.9% 9%/ 4.4%, the cumulative gain/maximum increase of 2.2%/3.9% of the UK FTSE 100, and the cumulative decline/maximum decline of the Nikkei 225 Index was -2.2%/-5.2%. Looking at industry performance, the top three sectors that rose in Hong Kong stocks in November were healthcare (1.0%), finance (0.8%), and telecommunications services (0.5%), while the top three sectors that declined were daily consumption (-5.1%), real estate (-4.5%), and utilities (-3.5%).

Hong Kong stocks are leading the way in this round, and they bottomed out and rebounded on August 5. Looking back at the market pace of Hong Kong stocks and A-shares in the second half of this year, the trend of Hong Kong stocks showed clear leadership. First, Hong Kong stocks took the lead in bottoming out on August 5, and Hong Kong stocks have risen even more since the market started. Since August, Hong Kong stocks have seen improvements from multiple factors at home and abroad, driving Hong Kong stocks to rebound on August 5. In contrast, the rebound in A-shares is lagging behind; the market only confirmed the rebound before and after the press conference of the State Information Office on September 24 and the Politburo meeting on September 26. Second, after the National Day holiday, Hong Kong stocks pulled back faster than A-shares, and the correction of Hong Kong stocks was deeper. Due to the rapid rise in the previous period, Hong Kong stocks began to recover on October 8, while A-shares rose on the first day after the National Day and began adjustments on October 9 the next day. It is worth noting that after the US election results were announced on November 6, the trend of Hong Kong stocks and A-shares diverged. Hong Kong stocks declined at an accelerated pace, while A-shares remained volatile at a high level.

Trump's victory suppressed the liquidity and risk appetite of Hong Kong stocks, and there was a time lag in repairing domestic fundamentals. Hong Kong stocks began to recover on October 8 and accelerated their decline after the Global Macro Super Week from November 4 to November 8. There are two reasons behind this: First, interest rates on the US dollar and US bonds were strengthened due to Trump's victory, and the liquidity of Hong Kong stocks was suppressed. Looking at macro-liquidity, Trump's policy is inflationary, driving up interest rates on the US dollar and US bonds and increasing liquidity tension; judging from microliquidity, the outflow of foreign capital accelerated markedly in November, putting pressure on the Hong Kong stock market. Second, Trump's policies limit risk appetite, and there is a time lag between policy efforts and fundamental improvements. Judging from risk appetite, Trump's tough policy proposition on China has led to suppression of risk appetite in Hong Kong stocks. From a fundamental perspective, the market is worried that if trade frictions between China and the US rekindle, it may impact the fundamentals of Hong Kong stocks, and that the time lag between the bottom of domestic policies and improvements in fundamentals may also be the reason for the recent pullback in Hong Kong stocks.

Currently, Hong Kong stocks are undervalued, transactions are shrinking, and the short selling ratio is high. The cost performance ratio is prominent in the context of strong policies. The current correction of Hong Kong stocks began on October 8. Current indicators show that Hong Kong stocks are already in the cost-effective range: judging from the valuation, the valuation of Hong Kong stocks has fallen to a historically low position, and the valuation of Hong Kong stocks is also low from an international comparative perspective. In terms of turnover, the trading volume of Hong Kong stocks shrank markedly after the National Day, and the trading volume of Hong Kong stocks and A shares shrank significantly. Looking at the short selling ratio, the current share of Hong Kong stock short sales turnover is higher than the average since 2014. The domestic policy base may have already emerged since 924, and the effects of the policy have already been initially shown in recent economic data. Looking back, there is plenty of room for growth in Hong Kong stocks as the incremental policy strengthens to help restore domestic fundamentals.

Risk warning: The unpredictability of US policy, the Fed's interest rate cut fell short of expectations, and domestic economic recovery fell short of expectations.