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

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

Trump’s China Blockade is Pumping ‘Tall Money’ Into Hong Kong Stocks
  • U.S. President Donald Trump is hanging explain stress on most valuable Chinese language conglomerates.
  • In consequence, a increasing quantity of Chinese language 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 transfer to blacklist most valuable Chinese language firms is unnerving mountainous conglomerates. Tech shares, along with Alibaba and Xiaomi, are seeing renewed put a query to in Hong Kong from investors fearing U.S. restrictions.

Ironically, the migration of Chinese language firms from the U.S. stock market fuels the put a query to for Hong Kong shares.

After TikTok and WeChat, the U.S. authorities acknowledged it may maybe maybe maybe well presumably prohibit China’s greatest chipmaker SMIC. 

On September 8, President Trump vowed to scale motivate from U.S.-China ties. He acknowledged 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 await President Trump to heighten the stress on China.

Amid the uncertainty across the ‘Section 1’ trade deal, the Trump administration is continuously concentrating on individual firms.

But President Trump’s approach may maybe maybe well presumably be benefiting China over the lengthy bound.

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

Sam Le Cornu, the CEO of Stonehorn World Partners, acknowledged it’s inflicting extra capital influx into Hong Kong shares.

He acknowledged a “mountainous quantity of cash” is arriving motivate to Hong Kong and its preliminary public providing (IPO) market.

All one year lengthy’s cease, Cornu expects an amplify in IPOs in Hong Kong. The kind may maybe maybe well presumably catalyze extra smartly-established Chinese language shares to transfer faraway from the U.S.

The concerning type leads to 2 cases. First, it may maybe maybe maybe well presumably scheme off China’s stock market to salvage better. 2nd, it boosts Hong Kong after the U.S. revoked its particular relationship with the location.

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

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

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

The departure of Chinese language firms from the U.S. may maybe maybe well well moreover simply no longer basically wretchedness the U.S. But it may maybe maybe maybe well presumably wait on Hong Kong and the sentiment around native shares.

Within the cease to term, Cornu anticipates extra firms to put together the paths of Alibaba and He acknowledged:

“There’s money to be made when looking at this job. I mediate the 2nd half of the one year will look an amplify… in these IPOs.”

The Shenzhen Inventory Switch, which tailors to tech firms, has moreover observed increased listings in most modern weeks.

May maybe well Hong Kong’s Dangle Seng Index Thrive?

The Dangle Seng index has aggressively began to embody key tech shares into the index in a brief length.

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

On September 7, the index listed Alibaba and Xiaomi, two Chinese language 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 acknowledged lengthy-term fund managers are an increasing number of involved in moving to Hong Kong-listed shares.

Merely three months up to now, smartly to keep investors in Hong Kong salvage been preparing for the worst-case scenario. Peep the video below:

Jeffries’ file expressed newfound optimism against Hong Kong shares, watching for the Dangle Seng index to salvage better. The file reads:

“In our look, it’s now not unthinkable that the index will almost definitely be expanded as extra firms attain to the market… We dwell bullish on the HSI.

The U.S. finds itself in an unhappy location wherein it maintains its tricky stance in Hong Kong nonetheless its policies are catalyzing the native stock market.

Samburaj Das edited this text for If you look a breach of our Code of Ethics or discover a steady, spelling, or grammar error, please contact us.


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