Trump’s China Blockade is Pumping ‘Huge Cash’ Into Hong Kong Stocks

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Trump’s China Blockade is Pumping ‘Huge Cash’ Into Hong Kong Stocks

Trump’s China Blockade is Pumping ‘Huge Cash’ Into Hong Kong Stocks
  • U.S. President Donald Trump is striking affirm tension on foremost Chinese language conglomerates.
  • This capability that, a rising sequence 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 transfer to blacklist foremost Chinese language companies is unnerving orderly conglomerates. Tech stocks, including Alibaba and Xiaomi, are seeing renewed demand in Hong Kong from traders fearing U.S. restrictions.

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

After TikTok and WeChat, the U.S. executive mentioned it would possibly per chance perhaps per chance per chance moreover limit China’s ideal chipmaker SMIC. 

On September 8, President Trump vowed to chop again from U.S.-China ties. He mentioned he would impose tariffs on American companies that slump away the U.S.

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

Until the November Presidential election, strategists await President Trump to intensify the tension on China.

Amid the uncertainty spherical the ‘Share 1’ change deal, the Trump administration is continuously concentrating on particular person companies.

But President Trump’s intention will doubtless be benefiting China over the long term.

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

Sam Le Cornu, the CEO of Stonehorn International Partners, mentioned it’s inflicting extra capital influx into Hong Kong stocks.

He mentioned a “good quantity of cash” is arriving again to Hong Kong and its preliminary public offering (IPO) market.

All year long’s discontinue, Cornu expects an develop bigger in IPOs in Hong Kong. The pattern would possibly per chance perhaps per chance per chance moreover catalyze extra nicely-established Chinese language stocks to transfer far from the U.S.

The referring to pattern outcomes in two eventualities. First, it would possibly per chance perhaps per chance per chance moreover motive China’s stock market to expand. 2d, it boosts Hong Kong after the U.S. revoked its particular relationship with the build of abode.

In July, President Trump mentioned on the White Apartment that the U.S. would contend with Hong Kong as China. He mentioned:

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

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

The departure of Chinese language companies from the U.S. gained’t necessarily harm the U.S. But it would possibly per chance perhaps per chance per chance moreover again Hong Kong and the sentiment spherical local stocks.

Within the shut to term, Cornu anticipates extra companies to practice the paths of Alibaba and JD.com. He mentioned:

“There’s cash to be made when this exercise. I accept as true with the second half of the year will search for an develop bigger… in these IPOs.”

The Shenzhen Inventory Alternate, which tailors to tech companies, has moreover noticed increased listings in recent weeks.

Could well Hong Kong’s Dangle Seng Index Thrive?

The Dangle Seng index has aggressively began to include key tech stocks into the index in a temporary duration.

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

On September 7, the index listed Alibaba and Xiaomi, two Chinese language 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 mentioned long-term fund managers are increasingly focused on inspiring to Hong Kong-listed shares.

Merely three months ago, nicely off traders in Hong Kong were preparing for the worst-case scenario. Ask the video below:

Jeffries’ myth expressed newfound optimism towards Hong Kong stocks, looking ahead to the Dangle Seng index to expand. The parable reads:

“In our gaze, it’s now not unthinkable that the index will doubtless be expanded as extra companies come to the market… We remain bullish on the HSI.

The U.S. finds itself in an unhappy jam wherein it maintains its disturbing stance in Hong Kong but its insurance policies are catalyzing the local stock market.

Samburaj Das edited this article for CCN.com. While you happen to search for a breach of our Code of Ethics or safe a staunch, spelling, or grammar error, please contact us.

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