Source: Golden Ten Data
At least judging from some indicators, Hong Kong stocks are much cheaper than Japanese stocks.
Goldman Sachs Group said that due to the growing valuation gap between Japanese and Hong Kong stocks, global fund managers may be beginning to remove popular long positions in Japanese stocks and short positions in Hong Kong stocks.
Goldman Sachs stock sales staff wrote in a trading report released last Friday that some macro hedge funds have begun to sell Japanese stocks and make up for their existing short positions in the Hong Kong stock market. They said that since Japanese and US stocks are overvalued, some funds that only go long may also switch to Hong Kong.
The Japanese stock market declined somewhat in recent weeks after leading global peers in the first quarter. After reaching a record high in March of this year, the Nikkei 225 index has accumulated a cumulative increase of 22% this year. Since then, it has narrowly avoided entering a technical correction.
Meanwhile, the Hang Seng Index was the best-performing major global stock index this month, with an increase of more than 7%. Factors driving the index's rebound include government policy support, capital inflows from the mainland, and the appeal of the local currency linked to the US dollar to overseas investors.
Bank of America securities strategist Willie Chan (Willie Chan) and others wrote in a research report released on Monday: “As US interest rates are likely to remain high for a long time, fund managers continue to withdraw or rebalance their portfolios from crowded transactions such as artificial intelligence, Japanese and US stocks, causing the price of Chinese stocks listed in Hong Kong to soar.”
At least judging from some indicators, Hong Kong stocks are much cheaper than Japanese stocks. The expected price-earnings ratio of the Hang Seng Index is 8.5 times, while the expected price-earnings ratio of the Nikkei 225 Index exceeds 21 times.
Guo Chen (Guo Chen), a financial analyst at CITIC Construction Investment, said that one of the reasons investors left Japan may also be due to the depreciation of the yen.
He said, “The depreciation of the yen exceeded expectations and eroded the return on investing in Japanese stocks. At present, the focus of foreign capital allocation in the Asian market has shifted from Japan to Hong Kong, which has become the main driving force behind the recent rise in Hong Kong stocks.”
However, some analysts said that this may not mean the end of the Japanese stock bulls and Hong Kong stock short trades, but only a brief interruption.
Gilbert Wong (Gilbert Wong), a Hong Kong-based strategist at Morgan Stanley, said that current developments “are not driven by fundamentals, and generally last for a short time. The relevant transaction will be completed within a week.”
Editor/jayden