Global Markets
Home›Global Markets›China›Mainland buyers turn to undervalued Hang Seng amid AI-…
Mainland buyers turn to undervalued Hang Seng amid AI-linked turmoil
In July, mainland investors bought HK$62.9 billion of Hong Kong stocks via Stock Connect, while the Hang Seng traded at 12.2 times earnings versus 25.8 for the S&P 500.
Mainland Chinese investors increased buying of Hong Kong stocks for a second straight month in July, using the cross-border Stock Connect program to rotate into what they see as a more resilient, undervalued market amid turmoil in artificial intelligence-linked equities, according to SCMP Economy.
The report links the shift to a broader pullback in Chinese, yuan-denominated technology shares after a weakening in the global AI trade, which pushed investors to seek alternative assets that could better withstand recent volatility. It notes the Hang Seng Index is among the cheaper major benchmarks globally due in part to lower exposure to the AI frenzy.
SCMP Economy reports that the Hang Seng rose 13.0% in July, even as the mainland’s tech-heavy Star Market 50 Index fell 26.0%, its biggest monthly decline on record. Melody Lai of SPDB International said risk aversion rose, but global funds largely stayed in equities, reallocating across markets and sectors, with Hong Kong benefiting from relatively low valuation and investors reassessing internet platforms.
The outlet also cites valuation comparisons from data provider Wind, saying the Hang Seng traded at 12.2 times earnings versus 25.8 for the S&P 500 and 14.2 for China’s CSI 300 Index.
Latest closeS&P 500 7,736.52 ▲1.8%|Hang Seng 26,009.40 ▲0.5%