Reported 5 months ago
The weak yuan is boosting the attractiveness of Hong Kong stocks over Chinese mainland stocks, with the Hang Seng China Enterprises Index outperforming the CSI 300 Index due to the weak yuan's impact on mainland stocks. The Hong Kong dollar's peg to the US dollar is shielding investors from higher US rates, making it a more appealing investment option. The influx of money from mainland investors into Hong Kong equities is supported by earnings optimism and cheap valuations, with analysts anticipating further depreciation of the onshore yuan due to delayed Fed rate cuts and trade tensions. Despite the dollar tailwind, the performance of Hong Kong stocks is still tied to the recovery of China's economy.
Source: YAHOO