Trump’s China Blockade is Pumping ‘Mountainous Money’ Into Hong Kong Shares

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Trump’s China Blockade is Pumping ‘Mountainous Money’ Into Hong Kong Shares

Trump’s China Blockade is Pumping ‘Mountainous Money’ Into Hong Kong Shares
  • U.S. President Donald Trump is striking explain tension on main Chinese language conglomerates.
  • As a end result, a rising alternative of Chinese language tech shares 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 switch to blacklist main Chinese language companies is unnerving astronomical conglomerates. Tech shares, alongside with 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 shares.

After TikTok and WeChat, the U.S. authorities talked about it might in point of fact perchance perchance also prohibit China’s largest chipmaker SMIC. 

On September 8, President Trump vowed to gash again from U.S.-China ties. He talked about he would impose tariffs on American companies that leave the U.S.

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

Till the November Presidential election, strategists stay up for President Trump to heighten the tension on China.

Amid the uncertainty spherical the ‘Part 1’ trade deal, the Trump administration is continually focused on person companies.

But President Trump’s map might perchance perchance even be benefiting China over the lengthy term.

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

Sam Le Cornu, the CEO of Stonehorn Global Partners, talked about it’s inflicting more capital influx into Hong Kong shares.

He talked about a “broad quantity of cash” is arriving again to Hong Kong and its preliminary public providing (IPO) market.

At some stage within the year’s discontinue, Cornu expects an amplify in IPOs in Hong Kong. The trend might perchance perchance also catalyze more nicely-established Chinese language shares to switch faraway from the U.S.

The relating to trend ends in two scenarios. First, it might in point of fact perchance perchance also cause China’s stock market to invent bigger. Second, it boosts Hong Kong after the U.S. revoked its particular relationship with the spot.

In July, President Trump talked about at the White House that the U.S. would take care of Hong Kong as China. He talked about:

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

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

The departure of Chinese language companies from the U.S. might perchance perchance also now not necessarily damage the U.S. But it might in point of fact perchance perchance also wait on Hong Kong and the sentiment spherical local shares.

In the shut to term, Cornu anticipates more companies to prepare the paths of Alibaba and JD.com. He talked about:

“There’s money to be made when taking a see at this exercise. I mediate the 2d half of the year will glimpse an amplify… in these IPOs.”

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

Could perchance Hong Kong’s Hang Seng Index Thrive?

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

hang seng stocks
The Hang 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. shares for Hong Kong’s.

CreditEase Wealth Management executive Nelson Yan talked about lengthy-term fund managers are an increasing selection of pondering transferring to Hong Kong-listed shares.

Merely three months within the past, prosperous traders in Hong Kong had been getting ready for the worst-case region. Peek the video under:

Jeffries’ picture expressed newfound optimism against Hong Kong shares, watching for the Hang Seng index to invent bigger. The picture reads:

“In our ogle, it’s miles now not unthinkable that the index will likely be expanded as more companies attain to the market… We remain bullish on the HSI.

The U.S. finds itself in an shadowy region whereby it maintains its refined stance in Hong Kong but its insurance policies are catalyzing the local stock market.

Samburaj Das edited this text for CCN.com. While you glimpse a breach of our Code of Ethics or win an precise, spelling, or grammar error, please contact us.

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