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

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

Trump’s China Blockade is Pumping ‘Mammoth Money’ Into Hong Kong Stocks
  • U.S. President Donald Trump is hanging explain tension on major Chinese conglomerates.
  • As a end result, a rising number of Chinese tech shares are departing from the U.S. to Hong Kong.
  • IPO listings in Hong Kong and China are rising, fueling the native stock market sentiment.

U.S. President Donald Trump’s switch to blacklist major Chinese corporations is unnerving good conglomerates. Tech shares, including Alibaba and Xiaomi, are seeing renewed demand in Hong Kong from merchants fearing U.S. restrictions.

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

After TikTok and WeChat, the U.S. authorities acknowledged it can perchance well limit China’s largest chipmaker SMIC. 

On September 8, President Trump vowed to scale help from U.S.-China ties. He acknowledged he would impose tariffs on American corporations that leave 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 intensify the tension on China.

Amid the uncertainty around the ‘Part 1’ change deal, the Trump administration is repeatedly concentrating on individual corporations.

However President Trump’s procedure would perchance be benefiting China over the lengthy budge.

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

Sam Le Cornu, the CEO of Stonehorn Global Partners, acknowledged it is some distance causing more capital inflow into Hong Kong shares.

He acknowledged a “massive quantity of cash” is arriving help to Hong Kong and its initial public offering (IPO) market.

All yr lengthy’s end, Cornu expects a upward push in IPOs in Hong Kong. The trend might perhaps perchance well catalyze more properly-established Chinese shares to switch away from the U.S.

The regarding trend ends up in two scenarios. First, it can perchance well squawk off China’s stock market to derive larger. 2nd, it boosts Hong Kong after the U.S. revoked its particular relationship with the squawk.

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

“Hong Kong will now be treated the same as mainland China.”

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

The departure of Chinese corporations from the U.S. might perhaps perchance well no longer necessarily misfortune the U.S. However it with out a doubt might perhaps perchance well profit Hong Kong and the sentiment around native shares.

In the advance term, Cornu anticipates more corporations to note the trails of Alibaba and JD.com. He acknowledged:

“There’s money to be made when taking a study this explain. I accept as true with the 2nd half of of the yr will peek a upward push… in these IPOs.”

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

Could perchance Hong Kong’s Hang Seng Index Thrive?

The Hang Seng index has aggressively started to consist of key tech shares into the index in a transient duration.

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

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

CreditEase Wealth Management govt Nelson Yan acknowledged lengthy-term fund managers are more and more pondering transferring to Hong Kong-listed shares.

Merely three months ago, properly to construct merchants in Hong Kong were making ready for the worst-case scenario. Appreciate the video beneath:

Jeffries’ file expressed newfound optimism in opposition to Hong Kong shares, waiting for the Hang Seng index to derive larger. The file reads:

“In our look, it isn’t unthinkable that the index will likely be expanded as more corporations come to the market… We live bullish on the HSI.

The U.S. finds itself in an downhearted squawk wherein it maintains its no longer easy stance in Hong Kong however its policies are catalyzing the native stock market.

Samburaj Das edited this text for CCN.com. At the same time as you happen to peek a breach of our Code of Ethics or derive a right, spelling, or grammar error, please contact us.

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