Translation in English: Hong Kong stocks rise with reduced volume, how will A-sh

Will the saying "sell in May and run fast" come true this time? After experiencing a two-day decline during the Labor Day holiday in the mainland, Hong Kong stocks have risen for nine consecutive trading days. Some market participants believe that Hong Kong stocks have certain short-term correction pressure, but they are still optimistic about the medium- and long-term prospects of Hong Kong stocks. The above investment formula based on limited historical experience has no reference value. Compared with the beginning of the year, the current funds have greatly increased their attention to Hong Kong stocks; there is not much suspense about the gap-up opening of A-shares after the holiday, because of factors such as policies exceeding expectations, most analysts continue to be optimistic about the continuation of the post-holiday market. In addition, as the international geopolitical situation has eased to a certain extent, oil and gold have certain room for correction, and it is expected that the adjustment after the holiday will continue. After the surge, Hong Kong stocks may adjust in the short term During the mainland holiday trading, there was no southbound funds in Hong Kong stocks. On May 2, there was a shrinking pull-up. On that day, Hong Kong stocks rose 2.5%, with a turnover of HK$115.9 billion. On May 3, after a gap-up opening, there was a slight correction, and the whole day rose by 1.48%, with a turnover of HK$116.2 billion. The Hang Seng Index closed at 18,604 points; on April 26 and 27, the turnover of Hong Kong stocks reached 157.2 billion yuan and 163.4 billion yuan. Hong Kong independent stock analyst Cen Zhiyong told the reporter of China Business News that Hong Kong stocks have broken through the upward trend. Due to the rapid rise in the short term, it is believed that after a slight adjustment, it is expected to rise again because funds have refocused on Hong Kong stocks. Debon Securities analyst Xue Wei said that since April 29, the yen exchange rate has rapidly appreciated from around 159 to around 153, but Hong Kong stocks have continued to rise, and the linkage relationship with the yen is no longer there. This is because more funds have paid attention to the low valuation opportunities of Hong Kong stocks, market sentiment has fermented, and Hong Kong stocks have entered the stage of self-valuation repair. From a structural perspective, the sectors with the largest gains in Hong Kong stocks since April 19 are the Internet, real estate, healthcare and other sectors that have reversed their predicaments, which verifies that valuation repair is the main line of this round of Hong Kong stock market rise. Looking forward, the current price-performance ratio of Hong Kong stocks is still at a relatively high position. Under the main line of "high odds", it is still a good configuration direction, but it is also necessary to pay attention to the rapid rise in sentiment and there will be periodic fluctuations and consolidation at any time. Zhao Honghe, an analyst at Minsheng Securities, said that the Political Bureau meeting was held in April, and the signal of stabilizing growth was more positive. This meeting made a more positive overall statement on the macro economy and stabilizing growth, focusing on broad fiscal efforts to speed up, monetary policy coordination, and new models for real estate overall research. In the stock market, real estate-related sectors led the gains, which also reflected the market's expectations for policies. As risk assets usher in a "tailwind period", Chinese assets may benefit the most. Both China and the United States have released positive signals on the policy side, and risk assets have ushered in a tailwind: China's economy has stabilized and rebounded, the US economy has cooled down, and the Fed's expectations of interest rate cuts have increased; it is expected that the rebalancing of overseas funds may still be maintained, or continue to flow into RMB assets that were under-allocated in the previous period. A-shares may fluctuate and rise again On Monday, May 6, A-shares will usher in the first trading day after the holiday. After the rise of Hong Kong stocks during the holiday and the rise of related index futures prices, there is not much suspense about the gap-up opening of A-shares. Most analysts continue to be optimistic about the market after the holiday. With the increase in funds entering the market, Hong Kong stocks and A-shares will form a situation of linked rise.Xinding Fund's Chief Economist Hu Yu stated that the Hong Kong stock market has been continuously adjusted for several years since 2021, and currently has the lowest valuation in the world. Considering the gradually decreasing expectations for US dollar interest rate hikes, the capital inflow back to Hong Kong could significantly enhance the valuation of Hong Kong stocks. Additionally, from the perspective of A-share policies, under the background of mutual connectivity, the likelihood of linkage between Hong Kong and A-share stocks is increasing, making the enhancement of investor returns a focal point of market attention.

Tianfeng Securities' strategist Wu Kaida said that the April Politburo meeting was held, setting the tone as "riding the momentum to avoid tightening at the beginning and loosening at the end, and consolidating and strengthening the positive trend of economic recovery." In terms of policy, existing macro policies should be implemented effectively at the forefront. Fiscal policy mentioned ultra-long-term special treasury bonds and special bonds, and the subsequent fiscal rhythm is worth paying attention to. Monetary policy focuses more on the total amount, including policy tools such as interest rates and reserve requirement ratios. In terms of real estate, for the first time, it proposed "coordinated research on policies to digest existing housing and optimize the increase in housing." In terms of industrial policy, the expression on technology covers four aspects: national strategic science and technology, emerging industries, future industries, and the upgrading of traditional industries.

Guohaisheng Securities' strategist Hu Guopeng said that at the end of April, there was a significant inflow of northbound capital, and the micro-liquidity environment is expected to continue to improve. With the previous release of the "New National Nine Articles" and the introduction of a series of supporting measures, the issuance of IPOs and the reduction of important shareholders will continue to be tightened, and the capital demand side will continue to be constrained. On the supply side of capital, on April 26, the net inflow of northbound capital was 22.4 billion yuan, setting a new high for the single-day net purchase since the opening of the Shanghai-Hong Kong Stock Connect, and Hong Kong stocks also began to warm up continuously in late April, indicating that the Chinese stock market is returning to the vision of foreign capital. The support policies of the capital market and the positive stance on real estate in the April Politburo meeting are expected to continue to boost risk appetite. There are still many policy highlights to come, the market valuation is still low, and incremental funds may continue to enter the market.

Geopolitical tensions ease, and crude oil and gold are bearish.

During the long holiday, as international geopolitical tensions eased, both gold and crude oil saw a significant decline. New York gold futures once fell below $2,300 per ounce, a significant correction from the high of $2,449 per ounce on April 12th, and crude oil fell below $78 per barrel.

On May 4th, according to media reports, Egyptian security officials stated that a delegation from the Palestinian Islamic Resistance Movement (Hamas) had arrived in Cairo, and the ceasefire negotiations in Gaza had made "significant" progress. In addition, according to Al Jazeera citing Hamas senior official Osama Hamdan, the ceasefire negotiations in Gaza are still ongoing. Hamdan said: "It is clear that there has been progress in the negotiations, and there are some positive aspects."

Hua Jin Securities analyst Qin Tai said that during the significant decline of the US dollar in the short term, the gold price, which was already at a high level, fell synchronously, which may mainly reflect that geopolitical conflicts have entered a stalemate, and the vulnerability of the global industrial chain has been slightly eased in a phased manner. Looking at the first layer of pricing mechanisms corresponding to the real interest rate of US Treasuries, the long-term real interest rate of US Treasuries has been fluctuating at a high level since last year, exerting a significant downward pressure on gold prices; and from the perspective of the second layer of pricing mechanisms, gold prices still have high uncertainty. The subsequent evolution of frequent geopolitical conflicts such as Russia-Ukraine and Israel-Palestine will have a profound impact on the global energy supply structure and the rebalancing mode of the industrial chains of major Eurasian industrial economies, and may continue to be reflected in gold prices. If the risks in a broad sense are significantly alleviated, gold prices may face a deep adjustment under the combined pressure of the two.

Jinyuan Futures analyst Tang Zaochu said that during the May Day holiday, international crude oil fell sharply, touching the lowest point in nearly seven weeks. At present, the conflict between Russia and Ukraine is still ongoing, and the ceasefire agreement between Israel and Hamas has not yet been implemented. However, the actual impact of geopolitical conflicts on crude oil supply is relatively limited, whether in terms of production or shipping, and the marginal impact of geopolitical risks on oil prices has weakened. As of the week of April 26th, US crude oil inventories increased by 7.3 million barrels, the highest level in nearly a year, far exceeding the market's previous expectation of a decrease of 1.1 million barrels. The level of US inflation remains too high, and Federal Reserve Chairman Powell stated that the next step is unlikely to raise interest rates, and the current interest rate will remain at a higher level. In the short term, the alleviation of geopolitical concerns and the unexpected surge in inventory data put pressure on oil prices, and crude oil may make up for the decline after the holiday.