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2025-04-25 16:02:38 According to a report from Guotai Junan International, intensifying volatility in the Donald Trump administration's tariff policies since early April has caused greater disruption to the Hong Kong stock market, still net inflows of southbound funds have hit new all-time highs. On April 22, while the Hong Kong stock market rallied for two consecutive days amid rising expectations for US tariff cuts on China, southbound funds logged net outflows. This pattern of short-term contrarian buying by southbound funds was not uncommon in the past. They tended to buy on dips when the Hong Kong stock market experienced a nosedive and take profits when the market was on a sustained uptrend. In terms of style selection, the investment preferences of southbound funds have demonstrated different characteristics at different times. In 1Q25, public funds added their positions in the tech growth theme, while in 1Q24, southbound funds mainly preferred sectors with high dividends. This year, however, with China's AI industry undergoing active changes, southbound funds' focus has shifted toward tech growth with a higher risk appetite. The current stronger-than-expected tariff shock from Trump demonstrated not only the "trend-defying" style of southbound funds but also a tilt toward tech growth in style selection. Specifically, southbound funds have maintained a "barbell" portfolio structure, posting a net inflow of $23.78 billion into the financial sector amid the severer-than-expected tariff shock from Trump. At the same time, holdings in tech growth sectors were increased. The two sectors with the largest net inflows from southbound funds were non-essential consumer goods (commerce and retail) and information technology, with net inflows of $49.48 billion and $27.78 billion respectively. The top five stocks in terms of net inflow scale were BABA-W (09988.HK), TENCENT (00700.HK), XIAOMI-W (01810.HK), CCB (00939.HK), and CHINA MOBILE (00941.HK), with total net inflows from southbound funds reaching $52.8 billion during the period. ~ AAStocks Financial News Web Site: www.aastocks.com | |