Chinese investors, whether mutual funds or retail, are on the brink of unloading tens of billions of dollars into Hong Kong's Hang Seng exchange. With the government relaxing restrictions, investors are more than likely to buy strong Chinese stocks on the cheap in HK since Shanghai's market is bloated.
Regardless of what we think or feel about bloated Chinese stocks, nobody can fight the trend and nobody can fight unprecedented new liquidity. But it bears close observation. No pun intended.
International Herald Tribune: Hang Seng hits record in quarter
Chinese investors may funnel $100 billion into Hong Kong in the next 12 months, said Adrian Mowat, the chief Asian strategist at JPMorgan. William Liu, the head of China research at CLSA, expects as much as $45 billion in the next six months.
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