China Galaxy Securities: Funds are seeking "safe haven" and reallocating within non-US assets.

According to a research report by China Galaxy Securities, amid the pressure on non-US assets globally, Hong Kong stocks rose against the trend on March 16th by 1.45%. This seemingly contradictory macro narrative of pressure on non-US assets actually reveals a trend of funds seeking "safe havens" and reallocating within non-US assets. On March 16th, southbound funds sold a net of 1.101 billion yuan, and on March 17th, foreign funds flowed into the Japanese stock market at 2.443 billion yuan, a decrease of 84.11% compared to February 25th, 2026. Against the backdrop of southbound fund selling, the Hang Seng Index continued to rise strongly, directly confirming that foreign funds were the main driver of the rebound in Hong Kong stocks that day. Some of these funds may come from the Middle Eastern financial markets like Dubai, where funds urgently need to find a safe "haven," while some funds may come from foreign funds withdrawing from the Japanese stock market. The core reason for foreign funds leaving Japan is its highly fragile economic structure. Rising oil prices may lead Japan, due to its lack of resources, to fall into a stagflation dilemma of input inflation and sluggish economic growth.