Goldman Sachs compares China's southbound and northbound flows

uh key point that we may want to talk or discussion that we may want to talk about is the self bom flows uh as as we as you mentioned uh really is is one of the bright spots that we can observe in the Chinese Equity market so far this year year today we're talking about 60 billion US dollar of net buying coming from Main in China to Hong Kong whereas for the north bound flows the opposite direction is1 billion US dollar of net selling I think that really reflects the strong yeld seeking demand from onshore investors uh and in Hong Kong um given low valuations a lot of the uh Equity names here are trading at quite attractive uh dividend yeld levels so that provides um an opportunity for domestic investors to deploy capital in the Hong Kong market interesting so just talk to us a bit more about shareholder returns in the Hong Kong market amongst the eight shares uh ker and just how resilient are they in an environment of lower rates and slower growth I think we're talking about quite a persistent Trend going from here um and we can think about that from a a few perspectives number one if you look at the cash that Chinese corporates uh have on their balance shits we talk about record high so they're still generating pretty good cash flows at the same time they're reducing capex so the capacity for Chinese companies to return excess cash to shareholders remains quite significant um on top of that um just this is the fact if you look at the number of companies that have engaged BuyBacks and paying dividends in the first half of this year we talk talking about again record height we've never seen such a uh such a big amount of companies uh returning cash to shareholders um now from a valuation perspective when it comes to investing and trading that theme um against a backdrop where Global rates are likely to come down and onore rates Chinese 10year Bond USS are now at record loads so for investors who can get stable and and visible cash incomes by buying these high dividend yielding stocks as well as stocks that are doing BuyBacks I think the the the attractiveness remains very very significant so we are still very much um convicted uh and and and and have high conviction on that theme in the at least in in the near future ker how much conviction do you have towards the China internet names after Alibaba upgraded its Hong Kong listing to uh primary is that a a big story that marks out Alibaba and from EV valuation uh point of view uh which name makes the most sense I think Alibaba um obviously um we need to wait for a few more days to um to to get the final results whether Baba will be included into the self bound trading Universe um but at least for now it seems like Alibaba has checked all the boxes when it comes to the criteria for self bound inclusion now based on our estimate uh we think that if Alibaba is is going to be included uh we think that it could attract around three billion us dollarss of potential buying from self-bound investors over the next few months and eventually uh the the net buying amount could go up to roughly speaking 12 billion US doar uh over the next one to two year time frame so I think from a liquid perspective definitely this is this is a big event and um obviously if the demand for Alibaba shares goes up it should be conducive to the share price um so our analyst remains quite fundamentally positive on Alibaba so we think that that liquidity event is just a bonus uh on top of the fundamental case that we um printing for or painting for Alibaba