Views & News

A View from Asia

| Asian Equities
Samir Mehta
12 Feb 2021
  • In an ongoing effort to liberalise financial markets, Chinese authorities have made two significant moves related to equities. The first led to MSCI’s inclusion of China ‘A’ shares into their indices. The second was the linkage between Hong Kong and China’s capital markets through northbound-southbound quota flows.
  • Currently, there is real excitement around Chinese companies listed in Hong Kong. A discount on valuation multiples for some of the duallisted China “A” shares quoted in Hong Kong draws attention. Add to that “the homecoming” of several shares from their ADR listing status to dual listing on the Hong Kong Stock Exchange.
  • This environment requires a degree of prudence. This is a liquidity-driven bull market which central banks might not derail. However, could this wild exuberance lead to a financial accident?

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