China Fund Daily
Recently, the Hong Kong stock market has risen strongly, or has entered a technical bull market. As of may 14, the hang Seng index had rebounded more than 16% from its April 19 low, returning to 19000 after nine months, according to Vander.
Multiple advantages to promote the recovery of Hong Kong stocks
Increased attractiveness of assets with high dividends
Looking back on the current round of Hong Kong stock prices, it began before the Spring Festival and rose rapidly in April. The reason is mainly caused by multiple positive factors such as capital, fundamentals and policy.
From a financial point of view, Wande data show that global capital inflows into Hong Kong stocks have intensified since mid-late April. On the one hand, with the recent volatility of US and Japanese stocks and the demand for global asset rebalancing, overseas investors have compensated for Hong Kong stocks with low valuations and high performance-to-price ratios; on the other hand, due to the visible performance inflection point of Hong Kong stocks in the earnings season in April, driven by industries such as the Internet, optional consumption and healthcare, the expected consistency of earnings growth in Hong Kong stocks has begun to reverse and revise.VideopokervideoHas attracted the attention of investors.
Macro data released by the National Bureau of Statistics for the first quarter of this year show that China's national economy continues to pick up and improves, to a certain extent, boosting the confidence of overseas investors to invest in China. In the long run, Hu Di, director of China Index and quantitative Investment at JPMorgan Asset Management, said that with the continuous repair of the endogenous momentum of the Chinese economy, it is still possible for investors at home and abroad to improve their allocation to China.
From a policy point of view, the recent policies and news that are good for the Hong Kong stock market have boosted the sentiment of the Hong Kong stock market. On April 19, the China Securities Regulatory Commission issued five capital market cooperation measures with Hong Kong, as well as a post-market news on May 9 that "tax on dividends and dividends of individual mainland investors investing in Hong Kong listed companies in Hong Kong may be reduced." this has boosted investor sentiment and enhanced the activity of Hong Kong stock trading, especially the core assets of Hong Kong stocks with high dividends.
Performance repair superimposed low valuation
Now is a good time for Hong Kong stocks to enter the market.
After an early deep adjustment, the Hong Kong stock market is in a historical valuation depression. According to Wande data, the premium index of Hang Seng AH shares reached 157 at one point on February 9, 2024.Videopokervideo.9, setting a new high in the past decade. With the recent strong trend of Hong Kong stocks, the Hang Seng AH share premium index is still around 140. In other words, Hong Kong stocks have a relative valuation performance-to-price ratio.
Taking the 50 constituent stocks of the S & P low-wave dividend index as an example, as of April 30, about 50% of the stocks were listed on both Hong Kong and A shares, according to the S & P index. Under the background that the discount ratio of H shares compared with A shares is significant, the undervalued attribute of Hong Kong stocks is more significant, which means that the price is more advantageous, and the elastic potential of the stock price upward in the future is expected.
As China's economy stabilizes, the Hang Seng Index's earnings growth rate is revised upward. From the perspective of corporate profitability, many listed companies have achieved year-on-year growth. According to Wande data, on May 15, 2024, the Hang Seng Index's homed net profit in 2024 is expected to grow by 12% compared with the same period last year.Videopokervideo.38%, compared with-2.35% in 2023, the trend of performance repair is obvious.
Hu Di, director of China Index and quantitative Investment Department of JPMorgan Asset Management, believes that Hong Kong stocks may have some differences and shocks after rising rapidly in April. However, with the improvement in the fundamentals of the domestic economy, monetary policy in developed economies may turn loose, as well as the undervaluation of Hong Kong stocks and the fundamentals of improved profits, Hong Kong stocks may have room for further improvement.
The value of dividend strategy allocation is prominent.
Hong Kong stock dividend index ETF (513630) is favored by investors
With the strong rise of Hong Kong stocks, Hong Kong stock ETF, which focuses on high dividend and high dividend assets, has become the focus of investors because of its unique advantages, attracting a large number of capital inflows.
According to Wande data, the S & P Hong Kong stock index of low-wave dividends has recently hit nearly one-year highs, rising 22.15% in the past six months as of May 17, 2024, surpassing the Hang Seng Index by 5.71%. The index focuses on the 50 stocks with the lowest volatility and high dividend yields in the S & P Hong Kong Stock Exchange Index, which provide investors with relatively stable dividend returns. It is worth noting that the index belongs to the Smart Beta index, the use of low volatility with high dividends of the two factors, component stocks screening more "smart".
Therefore, in terms of industry distribution, according to the data of S & P companies, as of April 30, 2024, the S & P low-wave dividend index is mainly concentrated in industries with low valuations and high dividends, focusing on sectors with lower valuations and higher dividends, such as finance, energy, industry, etc., to balance risks and returns. From an extended time perspective, even if the Hong Kong stock market was in the doldrums in the past two years, as of May 17, the S & P low-wave dividend index had a yield of 5.73% in the past three years, compared with 36.38% excess of the Hang Seng index over the same period.
In terms of constituent stocks, according to S & P and Wande data, as of April 30, 2024, the number of "Chinese prefix" companies accounted for 60%, all of which were leading companies in various industries, with a wider moat, more robust operation and stronger anti-risk ability. among Hong Kong stocks, central and state-owned enterprises contributed most of their profits. As of the annual report of 2023, the net profits of central and state-owned enterprises accounted for 74.59% of all Hong Kong stocks. The value of long-term investment is prominent.
At present, the only ETF product tracking the index in the domestic market-- JPMorgan Standard & Poor's Hong Kong Stock Exchange low Wave dividend ETF (expanded abbreviation)Videopokervideo: Hong Kong stock dividend index ETF, stock code: 513630) the scale and share have increased significantly since the beginning of this year. Wande data show that as of May 17, the net inflow exceeded 600 million, with the latest scale reaching 1.874 billion yuan, which is favored by the market and investors.
In addition, the JP Morgan Standard & Poor's Hong Kong Stock Exchange low Wave dividend Index Fund (Class A 005051 shareholder Class C 005052) also provides an one-click way to distribute high-quality dividend stocks in Hong Kong stocks for ordinary investors who do not have stock accounts or on-the-floor fund accounts.
Note: Wande data show that as of 2024.5.17, JP Morgan's Standard & Poor's Hong Kong Stock Exchange low Wave dividend ETF is the only ETF product that tracks the Standard & Poor's Hong Kong Stock Exchange low Wave dividend Index, which is an index strategy and the fund still has volatility risk. The S & P low-wave dividend index for 2019, 2020, 2021, 2022 and 2023 yielded 1.33 per cent,-24.3 per cent, 6.96 per cent,-4.079 and-1.55 per cent, respectively. The past performance of the index does not predict its future performance, nor does it constitute a guarantee of the performance of index funds.
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2024050061（CIS）