Key Benchmarks Performance
Hong Kong stocks tumbled and the benchmark Hang Seng index had a rocky start to the new year. It headed for the worst January since 2016 amid renewed concerns about corporate earnings and China’s economic recovery outlook. The Hang Seng Index has lost 9.2%, set for the worst start to a year since a 10% slide in the first month of 2016. Last year it was the worst-performing major market in the world. Hong Kong’s historic slump are because of some of China’s most influential and innovative firms are listed. Beijing’s stringent anti-Covid-19 curbs, regulatory crackdowns on corporations, a property-sector crisis and geopolitical tensions with the West have all combined to erode China and Hong Kong’s appeal. Japan was the best outperforming market in the region and its key benchmark- Nikkei 225 index posted positive return of 8.4%.
Asset Types & Lipper Global Classifications Analysis
The total 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong posted negative return of 2% on average in January. Among all by asset type, Money Market is the only one which posted positive return of 0.27% on average in January while Equity tope slid 3.64% on average. There are overall 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong market with a total 23 Lipper Global Classifications. Among all 23 classifications, the best outperforming sector for January is Equity Japan, rallied overall on average with 5.61%. Equity Sector Healthcare was the 2nd outperforming sector with an average return of 2.68%. The worst performing sectors in January were Equity Greater China (-8.15%), Equity China (-9.14%) and Equity Hong Kong (-9.54%).
Outlook
China and Hong Kong are highly correlated and influence each other. Chinese and Hong Kong equities are suffering a rout of epic proportions, with the total market value of their stocks having tumbled by more than $6 trillion since their peaks in 2021. New listings have dried up in Hong Kong, with the Asian financial hub losing its status as one of the world’s busiest venues for initial public offerings. China’s economy has been struggling to recover from strict COVID-19 pandemic lockdowns and restrictions that wreaked havoc on trade, sparked rare public protests against the government. A collapsed property market and shrinking population have added to the woes. Almost all economic indices in Hong Kong are performing poorly, with high office vacancy rates, falling building prices and the withdrawal of foreign funds. reductions in the number of international institutions maintaining their headquarters in Hong Kong and personnel of foreign institutions stationed in the city. These negative impacts take some time to be improved otherwise it’s not easy to see Hong Kong market’s rebound and recovery.
LSEG Lipper delivers data on more than 330,000 collective investments in 113 countries. Find out more.
