Hong Kong stocks are a very tight market. On the one hand, the linked exchange rate system makes it deeply affected by the liquidity of the US dollar. On the other hand, as mainland companies increasingly choose to go public in Hong Kong, the quality of listed companies is also inseparable from China's macroeconomy. If the economic cycles of China and the US are consistent and the above two major factors work in the same direction, the effect is certain, but if the cycles of the two countries are not consistent, the market will be very chaotic and conflicted, making it difficult to understand the direction of the market.
Today's Hong Kong stocks have broken out of the standard bear market style; in contrast, US stocks emerged from a bull market when inflation subsided, and pessimism is spreading in the market. More importantly, under rumors and confirmed Mainland “bailout” measures, Hong Kong stocks “lay back down” after three days of sharp gains (the Hang Seng Index plummeted by 1.6% on January 26, 2024).
Can Hong Kong stocks really hit? We are writing this article with questions, the main points:
First, the status of Hong Kong stocks is extremely special, making them have many disruptive factors, yet China's economic strength is increasingly becoming an absolute element of Hong Kong stocks;
Second, China's economic expectations are affecting Hong Kong stocks through the bond market, foreign exchange market, etc. This is also the main reason for the recent weakness of Hong Kong stocks;
Third, value stocks in the Hong Kong stock market have outperformed growth stocks in recent years. High-dividend stocks have become safe haven assets in the market. Recently, Tencent and Ali have been buying back large sums of money and paying dividends. When the industry stopped growing rapidly, Internet companies began to demand themselves with value stocks.
Interest spreads between China and the US affect Hong Kong stocks
Under the linked exchange rate system, Hong Kong is the largest offshore market for RMB.Its fluidity is essentially...