Photographer: Jerome Favre / Bloomberg
Photographer: Jerome Favre / Bloomberg
Hong Kong stock traders are about to find out if the $ 7.1 trillion market can be maintained without its largest source of flow.
As of Tuesday, trading links through the Hong Kong exchange trader that will allow mainland traders to buy domestic stocks will stop until February 17 due to the Lunar New Year holidays. Stocks are connected closing will hit record entry levels that helped boost Hong Kong’s equity market at the best start of a year since 1985.
Investors north of the border turned bargain hunters in late 2020 after valuations in some the land sectors reached their highest levels in more than a decade. The network of continental investors bought a total of about 48 billion US dollars in the first five weeks of this year, which already exceeds half of the total for 2020.
“We believe it might be worth advancing some profits before the commercial link stops for investor-driven stocks to the south,” including Tencent Holdings Ltd., Meituan i China Merchants Bank Co. Ltd. said Zhuang Jiapeng, fund manager of Shenzhen JM Capital Co.
Still, the incentive to take money out of the market is low, as people exchanging investment ideas during the holidays could reap new benefits when ties with Shenzhen and Shanghai are reopened. Zhuang said he is considering moving all of his fund’s assets to Hong Kong sometime later this year, compared to his current 70% exposure.
Although the links for the Lunar New Year are closed each year, traders are taking a closer look at this year’s unprecedented entries. Tencent, for example, has looked south billing through the links they represent approximately 42% of the daily average of the shares billing so far this year, according to data collected by Bloomberg.
Investors say the long-term exposure in Hong Kong is attractive given the amount of mutual funds that accumulate in the city’s assets. The financial center is the site for a growing number of hot start-ups and tech giants, including the short video platform Kuaishou Technology, which debuted Friday. Tencent Music Entertainment Group has selected banks to organize its plans second listing in the city.
“Hong Kong stocks will remain attractive to the mainland, while shares above A have skyrocketed and valuations are crazy,” said Dai Ming, fund manager at Hengsheng Asset Management Co. Hong Kong stock trend “.
– With the assistance of John Liu, April Ma and Jeanny Yu