HKEX: Is this the bottom?
HKEX: Is this the bottom?
Strong recovery post 2022-2023 slump, with further catalysts ahead
Hong Kong Exchanges & Clearing (HKEX) looks compelling and merits a revisit (the usual disclaimer: this is not investment advice).
HKEX’s sales and profits have nearly recovered to the previous highs of 2021, following a challenging period from 2022-2023.
Notably, Northbound Stock Connect reached an all-time high turnover in 1H2024—so much for “nobody is investing in China”!
Hong Kong’s beleaguered IPO market could see bottoming, with renewed confidence bolstered by Midea’s strong recent listing.
On top of this, with the rate-cutting cycle now underway following the Fed’s recent 50bps cut, there is further support for the IPO market and listed stocks in Hong Kong, particularly in the property and tech sectors.
Longer-term momentum continues to build. In April, CSRC introduced five new measures to expand the scope of the Stock Connect and to support Hong Kong as a listing destination for Mainland firms. Let there be no doubt: Hong Kong remains a “super-connector” to the Mainland.
Another emerging megatrend is the growing number of Mainland firms looking to expand internationally. Hong Kong continues to attract Mainland firms as they establish offshore headquarters, playing a key support role for those looking to venture abroad.