Driven by the Federal Reserve's dovish signals, Hong Kong stocks opened strong today (November 26). The HUABAO HONG KONG STOCK CONNECT HANG SENG CHINA (HONG KONG LISTED) 30 ETF (520560), which adopts a "tech + dividend" barbell strategy, showed active trading, with its intraday price rising over 1%. It is currently up 0.94%, aiming for a third consecutive daily gain.
Notably, the ETF is trading at a wide premium, indicating strong buying interest. In fact, it has seen net inflows for four consecutive days, totaling 31.61 million yuan, reflecting investor optimism about the Hong Kong market and active adoption of the barbell strategy for portfolio allocation.
Among its constituents, Meituan led gains with over 6%, followed by ZTO Express (+3%), Pop Mart and BYD (+2%), and BeiGene, ANTA Sports, and CITIC Group, among others.
Key market catalysts include: 1. **Fed's Dovish Signals**: Federal Reserve Governor Stephen Milan stated on Tuesday that high interest rates are hurting the labor market and advocated for deeper rate cuts to support the economy. According to the CME FedWatch Tool, markets now price in an 84.9% probability of a 25bps rate cut in December. How does this benefit Hong Kong stocks? China Galaxy Securities notes that Fed rate cuts could weaken the USD, pushing HKD interest rates lower and encouraging foreign capital inflows—both factors improving liquidity and boosting the Hong Kong market. JPMorgan highlights that unlike past rate-cut cycles triggered by global crises, this one coincides with rising corporate profits and stable global growth, making it particularly favorable for Hong Kong equities.
2. **Alibaba’s AI Revenue Growth**: Alibaba reported a 34% YoY increase in cloud revenue for Q2 FY2026, with AI-related revenue growing triple-digit YoY for nine consecutive quarters. Its quarterly capex reached 31.5 billion yuan, with ~120 billion yuan spent on AI/cloud infrastructure over the past year. CITIC Securities points out that Alibaba’s sustained investment in AI infrastructure reflects steady progress in domestic computing autonomy, signaling a potential industry inflection point.
Analysts suggest that in the current environment, a barbell strategy—balancing growth leaders (favored by foreign investors) and high-dividend stocks—is optimal, aligning with both policy support and tech breakthroughs.
Valuation-wise, the HUABAO HK 30 ETF’s underlying index trades at a P/E of 10.25x, near the 64.77% percentile since listing, offering attractive upside potential. The tech sector’s earnings recovery further supports valuation re-rating.
For investors seeking exposure to Hong Kong tech with lower volatility, the HUABAO HK 30 ETF (520560) and its feeder funds (Feeder A: 501301; Feeder C: 006355) provide a balanced mix of high-growth tech (e.g., Alibaba, Tencent) and stable dividend plays (e.g., China Construction Bank, Ping An Insurance), with flexible T+0 trading.
**Risk Disclosure**: The ETF tracks the Hang Seng China (Hong Kong Listed) 30 Index (base date: Jan 3, 2000; launch date: Jan 20, 2003). Constituent stocks are subject to index methodology changes. Stock mentions are illustrative and not investment advice. The fund carries an R4 (medium-high risk) rating, suitable for aggressive (C4+) investors. Past performance does not guarantee future results. Investment involves risks.