Huatai Securities: External factors could boost foreign investment in Hong Kong asset allocation.

Huatai Securities released a research report on Hong Kong stocks strategy, stating that looking ahead, foreign capital still has room to continue increasing allocation to the Chinese market: 1) Overseas liquidity is likely to ease due to factors such as monetary policy, financial regulation, and adjustments in bond duration, and the trend of US dollar liquidity may be loose; 2) Domestic fundamentals are expected to improve, and there is still room for the appreciation of the RMB exchange rate. However, it is also important to note that the importance of foreign capital in the Hong Kong stock market has decreased, with southbound capital accounting for more than 40% of transactions in the Connect Target. The sustainability of its future inflows is equally or even more worthy of attention.