Trump’s China Blockade is Pumping ‘Extensive Money’ Into Hong Kong Stocks

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Trump’s China Blockade is Pumping ‘Extensive Money’ Into Hong Kong Stocks

Trump’s China Blockade is Pumping ‘Extensive Money’ Into Hong Kong Stocks
  • U.S. President Donald Trump is hanging inform stress on major Chinese language conglomerates.
  • Due to this, a rising series of Chinese language tech shares 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 scurry to blacklist major Chinese language companies is unnerving colossal conglomerates. Tech shares, including Alibaba and Xiaomi, are seeing renewed count on in Hong Kong from merchants fearing U.S. restrictions.

Paradoxically, the migration of Chinese language companies from the U.S. stock market fuels the count on for Hong Kong shares.

After TikTok and WeChat, the U.S. authorities stated it could perchance perchance perchance well restrict China’s greatest chipmaker SMIC. 

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

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

Until the November Presidential election, strategists expect President Trump to accentuate the stress on China.

Amid the uncertainty across the ‘Portion 1’ exchange deal, the Trump administration is continually focusing on particular person companies.

However President Trump’s approach can also simply be benefiting China over the very prolonged time length.

alibaba
The yr-to-date performance of Alibaba’s Hong Kong stock. | Supply: Yahoo Finance

Sam Le Cornu, the CEO of Stonehorn Global Companions, stated it’s inflicting extra capital inflow into Hong Kong shares.

He stated a “mighty quantity of cash” is arriving abet to Hong Kong and its initial public offering (IPO) market.

All yr prolonged’s end, Cornu expects an expand in IPOs in Hong Kong. The pattern could perchance well catalyze extra well-established Chinese language shares to scurry far from the U.S.

The touching on pattern results in two eventualities. First, it could perchance perchance perchance well motive China’s stock market to magnify. 2d, it boosts Hong Kong after the U.S. revoked its particular relationship with the gap.

In July, President Trump stated on the White House that the U.S. would treat Hong Kong as China. He stated:

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

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

The departure of Chinese language companies from the U.S. obtained’t necessarily damage the U.S. Nonetheless it could perchance perchance perchance well profit Hong Kong and the sentiment round local shares.

In the come time length, Cornu anticipates extra companies to practice the trails of Alibaba and JD.com. He stated:

“There’s money to be made when this exercise. I mediate the 2d half of of the yr will peek an expand… in these IPOs.”

The Shenzhen Stock Alternate, which tailors to tech companies, has moreover seen elevated listings in contemporary weeks.

May perchance also Hong Kong’s Dangle Seng Index Thrive?

The Dangle Seng index has aggressively began to comprise key tech shares into the index in a brief length.

hang seng stocks
The Dangle Seng index’s yr-to-date performance. | Supply: Yahoo Finance

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

CreditEase Wealth Management executive Nelson Yan stated prolonged-time length fund managers are extra and additional brooding about shifting to Hong Kong-listed shares.

Merely three months ago, well off merchants in Hong Kong were making ready for the worst-case scenario. Gaze the video below:

Jeffries’ narrative expressed newfound optimism against Hong Kong shares, awaiting the Dangle Seng index to magnify. The narrative reads:

“In our ogle, it is never unthinkable that the index will seemingly be expanded as extra companies come to the market… We live bullish on the HSI.

The U.S. finds itself in an sad location wherein it maintains its tricky stance in Hong Kong but its policies are catalyzing the local stock market.

Samburaj Das edited this text for CCN.com. When you peek a breach of our Code of Ethics or fetch a simply, spelling, or grammar error, please contact us.

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