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

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

Trump’s China Blockade is Pumping ‘Mountainous Cash’ Into Hong Kong Stocks
  • U.S. President Donald Trump is striking speak stress on main Chinese conglomerates.
  • Consequently, a rising more than just a few of Chinese tech stocks are departing from the U.S. to Hong Kong.
  • IPO listings in Hong Kong and China are increasing, fueling the native stock market sentiment.

U.S. President Donald Trump’s pass to blacklist main Chinese corporations is unnerving trim conglomerates. Tech stocks, together with Alibaba and Xiaomi, are seeing renewed ask in Hong Kong from merchants fearing U.S. restrictions.

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

After TikTok and WeChat, the U.S. government acknowledged it would possibly perhaps maybe presumably perhaps well restrict China’s finest chipmaker SMIC. 

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

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

Till the November Presidential election, strategists expect President Trump to intensify the stress on China.

Amid the uncertainty around the ‘Allotment 1’ commerce deal, the Trump administration is repeatedly concentrated on individual corporations.

Nonetheless President Trump’s strategy will be benefiting China over the long time frame.

The yr-to-date efficiency of Alibaba’s Hong Kong stock. | Provide: Yahoo Finance

Sam Le Cornu, the CEO of Stonehorn Global Partners, acknowledged it is far inflicting more capital inflow into Hong Kong stocks.

He acknowledged a “mammoth sum of money” is arriving support to Hong Kong and its initial public providing (IPO) market.

All the scheme via the yr’s pause, Cornu expects an extend in IPOs in Hong Kong. The pattern would possibly perhaps presumably perhaps well catalyze more successfully-established Chinese stocks to pass far from the U.S.

The regarding pattern leads to 2 eventualities. First, it would possibly perhaps maybe presumably perhaps well put off China’s stock market to effect bigger. 2nd, it boosts Hong Kong after the U.S. revoked its special relationship with the put.

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

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

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

The departure of Chinese corporations from the U.S. would possibly perhaps presumably perhaps well no longer necessarily damage the U.S. Nonetheless it would possibly perhaps maybe presumably perhaps well revenue Hong Kong and the sentiment round native stocks.

Within the shut to time frame, Cornu anticipates more corporations to comply with the trails of Alibaba and He acknowledged:

“There’s money to be made when attempting at this exercise. I judge the 2d half of the yr will sight an extend… in these IPOs.”

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

Would possibly perhaps well Hong Kong’s Hang Seng Index Thrive?

The Hang Seng index has aggressively began to incorporate key tech stocks into the index in a brief duration.

hang seng stocks
The Hang Seng index’s yr-to-date efficiency. | Provide: 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. stocks for Hong Kong’s.

CreditEase Wealth Administration executive Nelson Yan acknowledged long-time frame fund managers are an increasing number of inquisitive about transferring to Hong Kong-listed shares.

Merely three months previously, successfully off merchants in Hong Kong were making ready for the worst-case scenario. Look the video below:

Jeffries’ disclose expressed newfound optimism in direction of Hong Kong stocks, anticipating the Hang Seng index to effect bigger. The disclose reads:

“In our gaze, it is no longer unthinkable that the index will be expanded as more corporations come to the market… We dwell bullish on the HSI.

The U.S. finds itself in an unlucky position whereby it maintains its advanced stance in Hong Kong however its policies are catalyzing the native stock market.

Samburaj Das edited this article for While you happen to sight a breach of our Code of Ethics or fetch a correct, spelling, or grammar error, please contact us.


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