A few thoughts after the Hong Kong stock market surged again

After a brief adjustment yesterday, Hong Kong stocks surged again today, with afternoon real estate-related news boosting the performance of real estate stocks. The market is paying attention to the upcoming space, and we have updated several pieces of information based on some of the latest data for your reference. As of today (closing on February 12), Hong Kong stocks are technically overbought overall (RSI at 74%), but the short-selling transaction ratio has decreased compared to previous days, indicating that some divergences are diminishing or that short squeezes are occurring due to the rise. The equity risk premium has dropped to 6.5% (it was 6.7% at the peak in May 2024 and 6% at the peak in October last year). Therefore, the overall conclusion is that sentiment is overdrawn in the short term. But is it extreme? It is certainly not the most extreme; the sentiment from October is still relevant. If we "move over" the exuberant sentiment from the early October peak, it would correspond to 23,000 points for the Hang Seng Index, which is possible but challenging. So, is there foreign capital buying in? Currently, the data we have only reflects up to last week (this week's data will be updated on Friday), and the conclusion is: long-term foreign capital (holding type, most important) is absent, while short-term foreign capital (such as passive funds and trading funds) should be present, but the biggest issue with the latter is that it is not sustainable, similar to the wave at the end of September. There are several interesting points about this wave of increase, which can also be seen as misconceptions. In fact, this time it is still a structural market overall, and it is an even more extreme structural market, with only over 20% of stocks outperforming the index (in the 924 market, over 60% of stocks outperformed the index)