Hong Kong defies doomsayers as Hang Seng Index reclaims 19,000-level in stock market bull run

Hang Seng Index closed on Monday above the 19,000-level for the first time since August, capping a 27.8 per cent rally from January’s low

Market has regained US$1 trillion in value in this technical bull run amid policy support measures

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A technical bull run has lifted the Hang Seng Index above the 19,000 level for the first time since August. Photo: Sam Tsang

Published: 5:37pm, 13 May 2024Updated: 9:04pm, 13 May 2024

Hong Kong is proving its resilience by defying some of its harshest critics. A surge in the local stock market over the past three months shows global investors are coming back, dismissing the view that the best is behind the city.

The Hang Seng Index closed at 19,115.06 on Monday, a level not seen since August. The index has risen by 27.8 per cent from the year’s low on January 22, putting it firmly in a technical bull run and making it the best performer among major global equity benchmarks.

The rally added more than US$1 trillion (HKS$7.82 trillion) in capitalisation back to the stock market. Investors were encouraged by policy support from China, as well as portfolio rebalancing as fund managers scouted for better value and abandoned overpriced markets elsewhere.

“A slew of support measures for local capital markets have helped lift confidence, while the economic data has also shown more signs of stabilisation,” said Jason Chan, senior investment strategist at Bank of East Asia. The market still has more room to run with support from corporate earnings and economic data, he added.

Investors mingling at the Saudi Tadawul Group’s inaugural Capital Market Forum in Hong Kong in May 2024. Photo: Edmond So

Beijing last month unveiled five measures to shore up investor confidence, including relaxing the eligibility criteria for exchange-traded products in the Stock Connect scheme. In the property market, more local governments have removed buying restrictions, reviving shares of many downtrodden developers.

The trillion-dollar Hong Kong market bounce is a rebuke of Stephen Roach, a Yale economist and former Asia chairman of Morgan Stanley, who argued that Hong Kong is over. Resilience this time, he later added, would require a new-found political and economic policy autonomy that seemed “highly unlikely.”