Hong Kong Stock Market Review: The fat water does not flow into the field of outsiders
The Hong Kong stock market has been affected by expectations of interest rate cuts and a surge in tech stocks, similar to the vulnerability of US small-cap stocks. However, the inflow of funds into the US stock market is mainly focused on tech stocks like big tech companies and XBI, with limited inflow into Chinese assets. The stock market needs to be vigilant against the potential trading downturn caused by delayed interest rate cuts. On the other hand, Tencent's suspension of share buybacks has led to poor performance in the Hong Kong stock market, while the mobile phone supply chain remains a bright spot in the market. Global mobile phone shipments have increased by 6.5% year-on-year, showing a trend of recovery. Personal computer shipments have also increased, but domestic demand is not strong, geopolitical risks are on the rise, and the stock market still relies on high interest rates and share buybacks for support
After the significant slowdown in inflation announced by the United States last Thursday, the asset markets experienced a major reversal. The Japanese yen, the Russell 2000 Index, and the Hong Kong stock market all rebounded, to some extent reflecting the similar status of Hong Kong stocks and US small-cap stocks, both easily stimulated by rate cut expectations.
However, after the weekend, with the expectation of the "understanding king" taking office, the probability of a rate cut in September is increasing. Coupled with the violent rebound in the cryptocurrency market, mining stocks drove the Russell 2000 Index to rise sharply again last night, while the Hang Seng Index continued to decline for two consecutive days.
The market anticipates that a rate cut will bring the flow of US dollars back into Chinese assets. However, it seems that US stocks are not flowing into foreign fields, but only towards the cryptocurrency market and XBI, among others. Rate cut expectations also pale in comparison to geopolitical risks.
Nevertheless, based on distorted US data statistics, there are often significant revisions in the future. If the rate cut is delayed too long, the stock market will not experience a soft landing but will instead turn into a major downturn. This is a problem that must be guarded against in the second half of the year.
On the other hand, Tencent's suspension of share buybacks has led to poor performance in the Hong Kong stock market. The only bright spot in the market lies in the mobile phone supply chain.
According to an IDC report, the global shipment volume in Q2 this year increased by 6.5% year-on-year, but decreased by 1.4% quarter-on-quarter, reaching 285.4 million units. The shipment volume has grown for the fourth consecutive quarter, indicating a stronger recovery than expected.
Although Samsung and Apple have benefited from the high-end market, their overall market share has declined. Domestic companies have increased the shipment volume of low-priced smartphones, focusing on emerging countries, to expand their market share in the face of weak demand.
At the same time, global personal computer shipments in Q2 increased by 3% year-on-year, growing for the second consecutive quarter, with an annual growth of over 5% excluding the domestic market. It appears that domestic demand is weak, geopolitical risks are increasing again, and the stock market can only continue to rely on high dividends and buybacks for support