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

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

Trump’s China Blockade is Pumping ‘Giant Money’ Into Hong Kong Stocks
  • U.S. President Donald Trump is striking speak stress on most predominant Chinese conglomerates.
  • In consequence, a rising quantity of Chinese tech stocks are departing from the U.S. to Hong Kong.
  • IPO listings in Hong Kong and China are growing, fueling the local stock market sentiment.

U.S. President Donald Trump’s pass to blacklist most predominant Chinese corporations is unnerving comely conglomerates. Tech stocks, in conjunction with Alibaba and Xiaomi, are seeing renewed inquire in Hong Kong from traders fearing U.S. restrictions.

Ironically, the migration of Chinese corporations from the U.S. stock market fuels the inquire for Hong Kong stocks.

After TikTok and WeChat, the U.S. authorities said it’s miles going to additionally limit China’s greatest chipmaker SMIC. 

On September 8, President Trump vowed to gash again from U.S.-China ties. He said he would impose tariffs on American corporations that trudge away the U.S.

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

Till the November Presidential election, strategists await President Trump to accentuate the stress on China.

Amid the uncertainty across the ‘Segment 1’ replace deal, the Trump administration is frequently focusing on individual corporations.

However President Trump’s strategy might perchance perchance well additionally be benefiting China over the prolonged term.

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

Sam Le Cornu, the CEO of Stonehorn World Companions, said it’s inflicting extra capital influx into Hong Kong stocks.

He said a “gargantuan quantity of money” is arriving support to Hong Kong and its initial public providing (IPO) market.

At some level of the year’s waste, Cornu expects an fabricate higher in IPOs in Hong Kong. The pattern might perchance perchance well additionally catalyze extra effectively-established Chinese stocks to pass a long way from the U.S.

The relating to pattern results in two scenarios. First, it’s miles going to additionally cause China’s stock market to expand. 2nd, it boosts Hong Kong after the U.S. revoked its particular relationship with the place of abode.

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

“Hong Kong will now be treated equivalent to mainland China.”

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

The departure of Chinese corporations from the U.S. might perchance perchance well additionally no longer essentially damage the U.S. However it’s miles going to additionally revenue Hong Kong and the sentiment around local stocks.

In the near term, Cornu anticipates extra corporations to prepare the trails of Alibaba and JD.com. He said:

“There’s money to be made when this task. I mediate the 2nd half of the year will detect an fabricate higher… in these IPOs.”

The Shenzhen Stock Exchange, which tailors to tech corporations, has additionally noticed increased listings in latest weeks.

Would perchance perchance additionally Hong Kong’s Cling Seng Index Thrive?

The Cling Seng index has aggressively began to consist of key tech stocks into the index in a transient interval.

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

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

CreditEase Wealth Administration executive Nelson Yan said prolonged-term fund managers are increasingly pondering animated to Hong Kong-listed shares.

Merely three months ago, effectively to place traders in Hong Kong were making ready for the worst-case scenario. Keep the video under:

Jeffries’ sage expressed newfound optimism in opposition to Hong Kong stocks, awaiting the Cling Seng index to expand. The sage reads:

“In our watch, it’s no longer unthinkable that the index can be expanded as extra corporations arrive to the market… We remain bullish on the HSI.

The U.S. finds itself in an unhappy space whereby it maintains its hard stance in Hong Kong however its policies are catalyzing the local stock market.

Samburaj Das edited this text for CCN.com. In case you detect a breach of our Code of Ethics or safe a factual, spelling, or grammar error, please contact us.

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