Hong Kong Stock Market Review: The Sudden Big Era
The Hong Kong stock market has entered a new era, with a record turnover of HKD 445.7 billion. Hot money inflows and speculative sentiment have spread, leading to significant rebounds in individual stocks. NEW WORLD DEV saw a 20% rebound in stock price due to a CEO change and plans to dispose of HKD 13 billion in non-core assets. TOPSPORTS rebounded by 42% after a sharp drop following profit warnings. Despite a decrease in southbound capital inflows next week, the market remains optimistic about a policy turning point, believing that good companies will still present buying opportunities. Chinese assets have outperformed, attracting foreign investment attention
The Hang Seng Index still has a long way to go to reach its historical high, but it has entered a new era, with record-breaking trading volume reaching HKD 445.7 billion. Hot money from around the world is flowing in, and speculative sentiment is spreading to many individual stocks, with the more they fall, the stronger the rebound.
As mentioned earlier, NEW WORLD DEV saw a 20% rebound in its stock price in one day with the positive boost of a CEO change. However, a change in leadership does not necessarily mean the industry's challenges will be resolved. The company has set a target to dispose of HKD 13 billion of non-core assets in the 25th fiscal year, with approximately HKD 3.8 billion completed in Q3, indicating that the previously rumored HKD 9 billion sale of K11 still remains a possibility. Interestingly, the company has stated that there is currently no plan for a rights issue.
Another example is TOPSPORTS, which experienced a significant drop due to profit warning, but its stock price rebounded by over 42% in two days. It is worth noting that BaoSheng International, which is also a distributor and has a market value equal to net cash, has had little reaction in its stock price, reflecting the importance of the Hong Kong Stock Connect.
Although there will be no inflow of southbound funds into the Hong Kong stock market next week, there is no need to worry too much. The market is already convinced that the current situation marks a turning point in attitude and policy. With fiscal counter-cyclical efforts and the central bank reducing its stock holdings, good companies experiencing pullbacks are still likely to see mindless buying.
Furthermore, while Chinese assets have performed well this year, they have yet to reach new highs in the global market in recent years. This alone is worth the continued attention of foreign investors