Hong Kong’s battered Hang Seng Index expected to pick up steam in second half of year. No, really
- Hong Kong’s benchmark has declined 13 per cent this year, hammered by the coronavirus
- Cheap Hang Seng Index is ‘an attractive and interesting opportunity,’ analyst says
Global fund managers are bullish on Hong Kong stocks in the second half of 2020.
Several factors will work together to push the Hang Seng Index higher, investment officers say. They include a weakening US dollar, increasing capital inflow from mainland China, as well as dirt-cheap valuations in the Hong Kong market.
The city’s benchmark had a dreadful six months filled with troubles, from one of the worst pandemics in human history to uncertainties over the city’s future after Beijing unveiled its effort to introduce a controversial national security law.
The benchmark has declined 13 per cent so far this year, entering a bear market and lagging behind the performance of China and US markets, which have been supported by a more resilient economy and massive monetary easing, respectively. The Shanghai Composite Index has fallen 2 per cent, while the CSI 300 index has gained 1 per cent. In the US, the S&P 500 has declined 6.8 per cent.