Morgan Stanley: Market trading volume is gradually flowing back from US stocks to Hong Kong stocks
Morgan Stanley pointed out that market trading volume is gradually shifting from U.S. stocks back to Hong Kong stocks. This year, southbound capital inflow into Hong Kong stocks is approximately USD 129 billion, with an average daily trading volume of USD 30 billion. The discount of H shares to A shares continues to narrow. International investors are refocusing on the Hong Kong market, with a significant increase in foreign participation in new stock issuances. It is expected that several large new stock issuances will occur in the coming months, keeping the Hong Kong market active
According to the Zhitong Finance APP, Zhang Xiaoyu, head of the Asia-Pacific Equity Capital Markets at Morgan Stanley, stated that southbound funds have been very active this year, with a cumulative inflow of approximately USD 129 billion into Hong Kong stocks, surpassing last year's total. The average daily trading volume has remained above USD 30 billion, nearly doubling year-on-year, while the discount of H-shares to A-shares continues to narrow. She mentioned that for companies listed in both Hong Kong and the United States, the trading volume in Hong Kong has risen to 36%, believing that market trading volume is gradually flowing back from U.S. stocks to Hong Kong stocks, with investors more willing to buy Hong Kong stocks.
In her speech at the Hong Kong Stock Exchange (00388) Future Technology Summit, she noted that international investors are clearly refocusing on the Hong Kong market, indicating that the participation of foreign capital in new stocks recently assisted by companies has significantly increased, including long-term funds such as sovereign wealth funds, which have a very positive driving effect. She also mentioned that they have recently received inquiries from investors in Europe and the United States. She pointed out that although the valuations of leading Chinese companies have risen considerably, clients believe that there are still many companies whose valuations have significant upside potential compared to U.S. stocks.
Regarding new stocks, Zhang Xiaoyu further indicated that this year's pricing, subscription multiples, and post-listing performance of new stocks in Hong Kong have been much better than in the past two years. As more companies with genuine innovative capabilities list in Hong Kong, this has become the biggest reason for attracting foreign investment. It is estimated that in the coming months, the Hong Kong capital market will still have many large new stock issuance projects exceeding USD 1 billion, and the Hong Kong market will remain active in the next six months to a year
