CMSC: Hong Kong stocks return to growth style after adjustment, focusing on internet and insurance.

CMSC released a research report stating that in recent times, Hong Kong stocks have experienced significant adjustments due to external impacts, with market reactions being relatively excessive. As the trade war eases and incremental policies release marginal benefits, they are sufficient to support the rebound of Hong Kong stocks. Looking at the entire fourth quarter, the view of "suppressing first and then rising" is reiterated. The market is more likely to witness a gradual or wave-like style transition, rather than a simple "switching off and on." It is expected that growth style will remain the main theme for some time in the future. In terms of industry recommendations, it is suggested to focus on internet and insurance sectors. Updated Hong Kong stock market perspective: Last week, the pessimistic expectations in the Hong Kong stock market were relatively consistent, with market, especially the growth sector, experiencing a pullback due to fluctuations in US-China trade war expectations. However, the report suggests that the market reaction has been excessive. With the easing of trade tensions and the release of incremental policies, there is hope to support the rebound of Hong Kong stocks. Looking at the entire fourth quarter, the view of "suppressing first and then rising" is reiterated. The question that investors are concerned about is whether the market style shift has arrived. The report suggests that the style shift is more likely to be a gradual or wave-like process, rather than a simple "switching off and on." It is predicted that with the alleviation of various uncertainties, the growth style will still be the main theme for some time in the future. In terms of industry recommendations, focusing on internet and insurance sectors is advised. Industry and index recommendations: Internet (930604.CSI), and non-bank stocks through the Hong Kong Stock Connect program (931024.CSI). Hong Kong stock market performance last week: The Hong Kong stock market witnessed a general decline last week (10/10-10/17), with the Hang Seng Index falling by 3.97% and the Hang Seng Tech Index dropping by 7.98%. The AH premium widened significantly to 120. Looking at different industries, last week saw more industries falling than rising, with utilities, telecommunications, and energy sectors experiencing slight gains, while information technology and healthcare sectors led the decline. Micro-fund flow: Hong Kong capital, southbound capital, and foreign capital all experienced net inflows. 1) The southbound capital saw a net inflow of 45.1 billion Hong Kong dollars, mainly flowing into financial and non-essential consumer sectors; 2) Foreign capital had a net sell-off of 380 million US dollars through ETFs; 3) Hong Kong local ETFs had a net outflow of 1.7 billion Hong Kong dollars, with a total net inflow of 45.1 billion Hong Kong dollars since the beginning of the year. Change in Hong Kong liquidity: After a rapid increase, Hong Kong market interest rates have stabilized, with the overnight Hibor at 3.04% and the 3-month Hibor rate at 3.61%. The US dollar to Hong Kong dollar exchange rate is at 7.77, gradually approaching the strong side exchange guarantee.