Trump’s China Blockade is Pumping ‘Enormous Money’ Into Hong Kong Shares

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Trump’s China Blockade is Pumping ‘Enormous Money’ Into Hong Kong Shares

Trump’s China Blockade is Pumping ‘Enormous Money’ Into Hong Kong Shares
  • U.S. President Donald Trump is striking insist rigidity on main Chinese language conglomerates.
  • As a consequence, a increasing quantity of Chinese language tech stocks are departing from the U.S. to Hong Kong.
  • IPO listings in Hong Kong and China are increasing, fueling the local stock market sentiment.

U.S. President Donald Trump’s circulation to blacklist main Chinese language companies is unnerving mountainous conglomerates. Tech stocks, including Alibaba and Xiaomi, are seeing renewed quiz in Hong Kong from merchants fearing U.S. restrictions.

Ironically, the migration of Chinese language companies from the U.S. stock market fuels the quiz for Hong Kong stocks.

After TikTok and WeChat, the U.S. govt talked about it might perhaps probably presumably well prohibit China’s supreme chipmaker SMIC. 

On September 8, President Trump vowed to scale abet from U.S.-China ties. He talked about he would impose tariffs on American companies that hump away the U.S.

Money is Flowing Into Hong Kong Shares; is it Counterproductive For the U.S.?

Till the November Presidential election, strategists preserve up for President Trump to heighten the rigidity on China.

Amid the uncertainty across the ‘Section 1’ swap deal, the Trump administration is continually targeting particular person companies.

But President Trump’s design might perhaps presumably additionally be benefiting China over the long length of time.

The year-to-date efficiency of Alibaba’s Hong Kong stock. | Source: Yahoo Finance

Sam Le Cornu, the CEO of Stonehorn World Partners, talked about it’s miles causing more capital inflow into Hong Kong stocks.

He talked about a “sizable quantity of cash” is arriving abet to Hong Kong and its preliminary public offering (IPO) market.

All year long’s discontinue, Cornu expects an develop in IPOs in Hong Kong. The pattern might perhaps presumably additionally catalyze more successfully-established Chinese language stocks to circulation away from the U.S.

The touching on pattern leads to 2 eventualities. First, it might perhaps probably presumably additionally place off China’s stock market to increase. Second, it boosts Hong Kong after the U.S. revoked its particular relationship with the tell.

In July, President Trump talked about at the White Home that the U.S. would treat Hong Kong as China. He talked about:

“Hong Kong will now be handled the identical as mainland China.”

Merely two months after the willpower, multi-billion greenback tech companies are flowing into Hong Kong. 

The departure of Chinese language companies from the U.S. couldn’t necessarily damage the U.S. But it might perhaps probably presumably additionally serve Hong Kong and the sentiment around local stocks.

Within the discontinuance to length of time, Cornu anticipates more companies to practice the trails of Alibaba and He talked about:

“There’s money to be made when taking a search for at this voice. I mediate the second half of the year will tell an develop… in these IPOs.”

The Shenzhen Stock Commerce, which tailors to tech companies, has additionally noticed increased listings in most modern weeks.

Could perhaps perchance Hong Kong’s Hang Seng Index Thrive?

The Hang Seng index has aggressively started to encompass key tech stocks into the index in a transient length.

hang seng stocks
The Hang Seng index’s year-to-date efficiency. | Source: Yahoo Finance

On September 7, the index listed Alibaba and Xiaomi, two Chinese language tech giants. Since mid-August, many merchants started to swap Alibaba’s U.S. stocks for Hong Kong’s.

CreditEase Wealth Management govt Nelson Yan talked about long-length of time fund managers are an increasing form of pondering transferring to Hong Kong-listed shares.

Merely three months previously, successfully off merchants in Hong Kong had been getting intelligent for the worst-case insist. Witness the video below:

Jeffries’ narrative expressed newfound optimism in direction of Hong Kong stocks, searching forward to the Hang Seng index to increase. The narrative reads:

“In our admire, it will not be unthinkable that the index will seemingly be expanded as more companies attain to the market… We dwell bullish on the HSI.

The U.S. finds itself in an miserable design wherein it maintains its tricky stance in Hong Kong however its policies are catalyzing the local stock market.

Samburaj Das edited this text for Whenever you happen to tell a breach of our Code of Ethics or receive a true, spelling, or grammar error, please contact us.


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