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 placing direct stress on major Chinese conglomerates.
  • Which means, a rising amount of Chinese tech shares are departing from the U.S. to Hong Kong.
  • IPO listings in Hong Kong and China are rising, fueling the local stock market sentiment.

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

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

After TikTok and WeChat, the U.S. authorities said it would possibly presumably per chance also restrict China’s largest chipmaker SMIC. 

On September 8, President Trump vowed to reduce from U.S.-China ties. He said he would impose tariffs on American firms 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 stay unsleeping for President Trump to intensify the stress on China.

Amid the uncertainty across the ‘Fragment 1’ trade deal, the Trump administration is repeatedly focusing on particular person firms.

But President Trump’s intention also can very effectively be benefiting China over the long length of time.

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

Sam Le Cornu, the CEO of Stonehorn World Companions, said it’s a ways causing more capital inflow into Hong Kong shares.

He said a “massive amount of money” is arriving lend a hand to Hong Kong and its preliminary public providing (IPO) market.

For the length of the year’s discontinue, Cornu expects an amplify in IPOs in Hong Kong. The vogue also can catalyze more effectively-established Chinese shares to dart away from the U.S.

The pertaining to vogue finally ends up in two instances. First, it would possibly presumably per chance also enviornment off China’s stock market to expand. 2d, it boosts Hong Kong after the U.S. revoked its special relationship with the enviornment.

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

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

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

The departure of Chinese firms from the U.S. gained’t necessarily damage the U.S. On the opposite hand it would possibly presumably per chance also earnings Hong Kong and the sentiment around local shares.

In the advance length of time, Cornu anticipates more firms to discover the paths of Alibaba and JD.com. He said:

“There’s money to be made when having a examine this suppose. I judge the 2nd half of of the year will ogle an amplify… in these IPOs.”

The Shenzhen Inventory Change, which tailors to tech firms, has also seen increased listings in unique weeks.

Might maybe well presumably additionally Hong Kong’s Hang Seng Index Thrive?

The Hang Seng index has aggressively began to encompass key tech shares into the index in a temporary length.

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

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

CreditEase Wealth Management executive Nelson Yan said long-length of time fund managers are more and more enraged by shifting to Hong Kong-listed shares.

Merely three months previously, affluent investors in Hong Kong were making ready for the worst-case scenario. Leer the video below:

Jeffries’ account expressed newfound optimism in direction of Hong Kong shares, ready for the Hang Seng index to expand. The account reads:

“In our glimpse, it’s a ways not unthinkable that the index will be expanded as more firms come to the market… We remain bullish on the HSI.

The U.S. finds itself in an depressed enviornment whereby it maintains its hard stance in Hong Kong nonetheless its policies are catalyzing the local stock market.

Samburaj Das edited this text for CCN.com. As soon as you happen to ogle a breach of our Code of Ethics or secure a factual, spelling, or grammar error, please contact us.

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