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Hong Kong stock market
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Singapore hedge fund says Hong Kong stocks are ‘once-in-a-lifetime’ chance for big upside after wildest two years since 2008

  • Asia Genesis founder and CIO says stocks in Hong Kong and mainland China have priced in all the bad news
  • ‘Risk reward is the best I have seen in 40 years of investing and trading,’ he said

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An electonic board shows major Hang Seng indices outside a bank in Central, Hong Kong on December 11. Edmond So
Jiaxing Li
Hong Kong’s stock market ended the year on a miserable note, with some US$520 billion of value obliterated. To Singapore-based hedge fund manager Chua Soon Hock, this provides a “once-in-a-lifetime” opportunity to pick up the pieces.
The market kicked off the year with a bang, with investors lapping up so-called “China reopening” stocks, soon after Beijing ended its zero-Covid policy. That also marked the highest point of the year for local equities, as the rally quickly faded along with optimism about China’s recovery momentum and appetite for risk as borrowing costs surged.
The Hang Seng Index jumped 10.4 per cent in the first month of the year, sending the gauge to a high of 22,688.90 on January 27, the highest closing point in 2023. The gauge’s worst month arrived soon enough in the form of a 9.4 per cent sell-off in February. The swings in the index ranked among the wildest, up there with gyrations seen in recent financial crises.
The 19.8 point win-loss swing followed a rocky year of trading in 2022 amid Covid-19 pandemic curbs, when the best gain was 26.6 per cent and the worst 14.7 per cent. The index swings are comparable to the volatile two-year periods during the 2008-09 global financial meltdown and the 1997-98 Asian financial crisis.
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China’s weaker-than-expected economic recovery, underwhelming policy response and higher US interest rates have been the bane of investors’ lives of late. Persistent property sector woes and lingering concerns about tech sector regulations and crackdowns added further pressure. Things are changing for the better.

Chua Soon Hock, founder and CIO of Asia Genesis Asset Management in Singapore. Photo: Handout
Chua Soon Hock, founder and CIO of Asia Genesis Asset Management in Singapore. Photo: Handout

“All the worst news is priced into the market. The media and [market] players are entrenched in great dislike and linear extrapolation,” said Chua, founder and chief investment officer at Asia Genesis Asset Management. “Chinese policymakers are taking more economic measures to address the bear market and loss of confidence.”

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“For long term investors looking for big upside in future, high quality Chinese stocks are a no-brainer. This is an unprecedented once-in-a-lifetime opportunity to invest in Hong Kong and mainland stock markets.”

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