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Hong Kong stocks poised to rebound as monetary easing boosts China’s economic recovery, says Hang Seng Qianhai Fund Management
- Hong Kong stocks are likely to rebound in the second half, as the market is ‘too pessimistic’, says Hang Seng Qianhai Fund Management
- More supportive fiscal and monetary policies expected to address China’s uneven recovery, says the fund and HSBC Global Private Banking
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Iris Ouyangin Shenzhen
Hong Kong stocks are likely to rebound from heavy sell-offs in the second half of the year as a potential easing of monetary policy boosts China’s economic recovery, according to Hang Seng Qianhai Fund Management.
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The fund, the first Hong Kong capital-controlled mutual fund manager in mainland China, with assets under management of 20 billion yuan (US$2.8 billion), believes the city’s benchmark Hang Seng Index is about to bottom out and sees current market sentiment as “too pessimistic.”
“The economy has cycles, and based on previous experience China’s economy will recover in the second half,” said Watson Qi, head of equity investment for the fund based in Qianhai, Shenzhen, in an interview. “The market is approaching, or closer to, the bottom now.”
Concerns about China’s economy have dragged Hong Kong stocks into a bear market. Wednesday’s official manufacturing purchasing managers’ index (PMI) data further dented confidence in the so-called China reopening trade which had fuelled a rally after China lifted its Covid-19 restrictions.
Global investors are on track to record net sales of their Chinese onshore equities for a second consecutive month as the yuan fell to a key threshold of 7.1 against the US dollar.
A spike in US-China geopolitical tensions, weak external demand and uncertainties around the US debt ceiling all underpinned the sell-off.
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