Funds Add to Healthcare, Trim Tech Hardware as Institutions Seek Structural Opportunities in Hong Kong Stocks

With public fund third-quarter reports now fully disclosed, attention has focused on changes in their Hong Kong stock allocations. Overall, as of the end of the third quarter, actively managed equity public funds remained underweight Hong Kong stocks relative to their benchmarks. By sector, they concentrated on adding to biopharmaceuticals and other healthcare sectors in the third quarter, while making larger reductions in tech hardware areas such as semiconductors. Looking ahead for Hong Kong stocks, besides the persistently high overseas interest rate environment, the outcome of the U.S. midterm elections may become a new variable disrupting the market's trajectory. Industry insiders believe that in the short term, a defensive-first approach and waiting for earnings to break the deadlock should be maintained, with low-volatility dividend assets continuing to be favored. For the technology sector, they suggest focusing on companies with clear industry trends, established profitability, ample free cash flow, and AI investments that have already generated actual commercial returns. (China Securities Journal)