Time to be positive about Hong Kong stocks, fund manager who correctly forecast January pullback says

There are ‘gradual but very clear’ signs that China’s economy has improved, MegaTrust Investment’s Qi Wang says

Hong Kong’s ‘fear gauge’, the Hang Seng Volatility Index, has fallen back to levels seen before the Credit Suisse crisis rattled local investors

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A screen displays the Hang Seng stock index in Hong Kong’s Central district. The banking crisis in the US and Europe will only ‘inconvenience’ the local market, Wang says. Photo: Reuters

Published: 7:30am, 23 Mar 2023

It is time to be positive about Hong Kong stocks again, with a US$450 billion correction over, according to boutique-fund manager Qi Wang. It will not be smooth sailing, but the market is more likely to rise than drop over the next two months, he said.

Positive market drivers supported by the Chinese economy are likely to offset external downside risks, said the founder and CEO of MegaTrust Investment in Hong Kong. The improving basis will boost the odds that the Hong Kong market will pick up during the next two months, said Wang, who correctly forecast that the market would pullback in January.

“There are gradual but very clear signs that China’s economy has improved,” Wang said, citing data such as rising housing prices and travel numbers. External factors such as the banking crisis in the United States and Europe will only “inconvenience” the local market, he added.

Hong Kong’s benchmark index has suffered a 14 per cent pullback since peaking on January 27. China’s top leadership reshuffle, the US Federal Reserve’s rate hike campaign and the banking turmoil in recent weeks have ended a reopening euphoria and wiped out US$450 billion from the city’s broader market.

Qi Wang, the founder and CEO of MegaTrust Investment in Hong Kong. Photo: LinkedIn

However, despite the ongoing banking crisis, sentiment appeared to have eased going into the week, with the local market rising for two straight days after regulators worldwide rushed to rescue lenders in the US and Europe. The Hang Seng Volatility Index, known as the “fear gauge”, has fallen back to levels seen before the Credit Suisse crisis rattled local investors.