On the first trading day of 2022, Hong Kong's main board opened higher but quickly turned negative, followed by volatile trading in the red. The Hang Seng Index closed down 0.53% at 23,274.75 points with a total turnover of HKD 70 billion for the day.
The Shanghai-Hong Kong Stock Connect will resume trading tomorrow. In the absence of southbound inflows, Hong Kong's daily trading volume has been below HKD 70 billion in recent days compared to the usual volume of around HKD 130 billion. According to data from the Hong Kong Stock Exchange, southbound inflows account for about 30% of daily trading volume, which indicates that southbound inflows contribute roughly HKD 40 billion per day. This means that without southbound funds, foreign capital has also reduced its trading volume by HKD 20 billion, showing the significant role southbound inflows play in enhancing liquidity in the Hong Kong market.
Most stocks in the Hang Seng Tech Index declined, but Kuaishou rose 3.54%, contributing the most to the index. The Hang Seng Tech Index closed down 0.54% today at 5,640.47 points.
Although the broader market performed poorly today, the TCM sector continued last week’s strong momentum and surged significantly.
The positive news for TCM came on Friday night when the National Healthcare Security Administration and the National Administration of Traditional Chinese Medicine announced plans to include TCM institutions as designated medical insurance providers and incorporate appropriate TCM medicines and healthcare services into the scope of medical insurance reimbursement.
TCM has been receiving almost entirely good news recently: the centralized procurement process ended with price cuts better than expected, some leading products started raising prices, and now there is the inclusion in medical insurance. In short, it keeps rising sharply.
Institutional investors now believe that the TCM industry is facing a new development opportunity. The combination of the pandemic and the accelerating aging population, along with an increase in chronic disease incidence, continues to expand the market. Consumers’ acceptance of TCM...