01 view
Written by: Commentary Editing Room
2021-01-20 17:00
Last update date: 2021-01-20 17:01
There were no major financial events on Tuesday (19th), but the Hong Kong stock market rose sharply. The Hang Seng Index once rose by nearly a thousand points, and finally ended with a rise of more than 800 points. This is the most recent increase, and the turnover is even higher. Breaking 300 billion, setting a historical record.
Hong Kong stocks also recorded 300 billion transactions the next day.
Since the beginning of this year, Hong Kong stocks can be described as "bullish", and they are inseparable from the inextricable relationship with the Chinese economy.
The value and turnover of Hong Kong stocks have experienced explosive growth since the new year, far exceeding the performance of other major regions.
In the 12 trading days from the beginning of the month to the 19th, the Hang Seng Index rose by 8.8%, far away from China's Shanghai Composite Index 2.7% and the US S&P 500 Index 1.1%. The stock market was immersed in a booming bull market.
Will become a world-class fundraising platform
Hong Kong stocks have been able to violently rise, and have an inseparable relationship with China.
From the perspective of long-term factors, under the struggle between China and the United States, the United States has repeatedly restrained Chinese companies. Faced with various threats such as delisting, targeting, and forced sales, those Chinese companies that have already listed in the United States have returned to Hong Kong for listing. Listed companies are also deterred from the United States.
A large number of high-quality mainland stocks with growth potential, including ATMXJ (Alibaba, Tencent, Meituan, Xiaomi, JD), are listed in Hong Kong.
The basic pattern of Sino-U.S. rivalry is unlikely to change drastically in the short term. The trend of Chinese companies listing in Hong Kong will continue, which is the basic factor for Hong Kong's stock market to afford continuous growth.
In fact, in 2020, although the stock market index did not increase significantly, the popular Chinese concept stocks have also attracted a lot of capital deployment, and the turnover has basically more than doubled compared with the 2018 trade war.
With the appreciation of the renminbi, the valuation of Hong Kong stocks is attractive due to the widening of the AH share discount.
(Profile picture)
Good Mainland Economy and Policies
In the short-term, the Hong Kong stock market's increase in this round is also inseparable from the mainland.
On Monday, the mainland announced that GDP broke expectations, and the market generally expects that the Biden administration will launch a more pragmatic China policy after it comes on the court. The Chinese economy will have a strong momentum in the coming year, which is the basis for creating the value of Hong Kong stocks and Chinese companies' investment.
A more direct factor is the direct policy support from the Mainland.
At the end of last year, the National People's Social Security Insurance notified the nation to expand the scope of investment in annuity funds from domestically only to investing in Hong Kong stocks through stock-based pension products or publicly offered securities investment funds, opening the door for mainland social security annuities to invest in Hong Kong stocks.
Due to capital restrictions in the Mainland, a large amount of funds must remain in the Mainland. As a result, many blue-chip stocks listed in the Mainland have been speculated too high without a choice.
Driven by official policies, other mainland funds have also focused on Hong Kong stocks, which are cheaper than their valuations.
Recently, mainland financial and securities news has mentioned "south to dig for gold", and there is a boom in Hong Kong stocks.
(The scale of public funds that can invest in A-shares and Hong Kong stocks through Shanghai and Shenzhen-Hong Kong Stock Connects reached 2,293.2 billion yuan. Source: Wind)
Where does China want the financial center to be?
Regardless of the above-mentioned factors, Hong Kong's stock market and financial market are inseparable from the mainland factors.
Facts are breaking many misstatements about Hong Kong's financial status.
After the "Hong Kong National Security Act" was passed, Western media screamed that "Hong Kong is dead." Western countries, led by the United States, have announced that Hong Kong will lose its status as an international financial center.
Last year, Hu Xijin, the editor-in-chief of the official media "Global Times", once stated that a country as large as China must have a financial center, and wherever China thinks it is, it is.
These remarks may sound impolite, but as a financial center based on China and facing the world, Hong Kong is an indisputable fact.
China's powerful economic system inevitably needs one or more financial centers, and the location of these financial centers is not determined by the United States through some Hong Kong Relations Act, but by the policies of the Chinese authorities and the market itself.
On August 14, 2020, Foreign Ministry Spokesperson Zhao Lijian said that Hong Kong’s status as an international financial center is not a gift from any country, let alone someone who can take it away.
300 billion turnover is just the beginning
Hong Kong's unique position is the main reason for its becoming a financial center.
From the perspective of the overall environment in which China and the United States are fighting, Hong Kong is part of China and has high predictability and stability for the Mainland. Moreover, under the design of "One Country, Two Systems", Hong Kong is still the only free port in the Mainland so far. Therefore, Hong Kong is naturally It is an inevitable choice for the mainland outside the US market.
Countries such as Japan claim to replace Hong Kong, but the Hong Kong stock market has always been dominated by mainland companies. Why do Chinese companies choose Japan instead of Hong Kong?
Institutionally, such as the Social Security Fund’s investment in Hong Kong stocks and the Southbound Stock Connect mechanism both show that mainland policies can directly affect whether Hong Kong is a prosperous financial center.
After the United States lists sanctions, the impact on Hong Kong cannot at all surpass China's support, which proves who has the dominant power on this issue.
With the ever-increasing financial relations between China and Hong Kong, the 300 billion transaction may be just the beginning.
As China's economy grows, Hong Kong will only become an increasingly important investment trading hub.
This also shows that no matter how western countries comment, "One Country, Two Systems" is still Hong Kong as a basic financial center. Without "One Country" Hong Kong does not have the conditions to become a financial center, and "Two Systems" ensures that Hong Kong can Become the inland window to the world.
For the Hong Kong government, it has to seize the important opportunity of the development of the stock market to transform huge funds into more diversified economic growth drivers outside the financial market.
With the epidemic and many uncertain factors, the hot financial market has become an important opportunity to bring Hong Kong out of economic difficulties.
The Enlightenment of Ant's Listing to Hong Kong Government
The Hang Seng Index reorganizes blue chips to increase Hong Kong enterprises can only struggle to survive?
It is difficult for Japan to replicate Hong Kong's status as an international financial center
01 depth
Hang Seng Index Hong Kong Stock Exchange 01 Viewpoint