2024-01-23 03:41:30
Financial dismantling | Hang Seng Index 10,000 = loss of ten Hong Kong GDP | Yan Baogang
“The more it falls, the worse it gets.” There is no lowest point in Hong Kong stocks, only lower levels. The Hang Seng Index fell for two days in a row, falling a total of 430 points or 2.8%, falling below the 15,000-point mark and closing at a 15-month low, 14,687 points away from the 2022 low. The difference is less than 300 points. Since the beginning of 2024, the Hong Kong stock market has only risen in two trading days. Basically, it has been falling most of the time. It has temporarily dropped 2,086 points for the whole month, a drop of 12%. In fact, it is not an exaggeration to describe it as a “stock market crash”.
The drop in the Hang Seng Index alone may not necessarily be a “painful experience” for people who have not yet entered the market, but to better measure the scale of the drop, the total market capitalization of Hong Kong stocks can be used to compare it. After the Hang Seng Index fell below 15,000 points, the total market capitalization of Hong Kong stocks has fallen to the level of 27 trillion, returning to the level of 2016. It has fallen 22% in one year, and has fallen even more than the historical high of 58 trillion in February 2021. 53%, the market value lost 31 trillion Hong Kong dollars (that is, 31,000,000,000,000 yuan).
How much is 31 trillion Hong Kong dollars? The conversion is the market value of 12 Tencents, or 10.9 times Hong Kong’s GDP (2022 level). In other words, we have evaporated nearly ten Hong Kong’s economic scale.
Of course, I agree that both market capitalization and the Hang Seng Index are book numbers. If they evaporate, they evaporate. Of course, investors will face losses, and the general public will also be implicated to some extent because of the Mandatory Provident Fund. Don’t forget our Exchange Fund. They have also been buying Hong Kong stocks. Recently, a political party has advocated that the Exchange Fund should increase its buying of Hong Kong stocks, and it has even been recognized by Hong Kong’s official media. This is the most worrying thing.
I noticed that some people who had been supporting the Hong Kong stock market began to justify themselves, saying that “there are enough people who are negative”, and then began to count that some technical indicators such as RSI and MACD only failed temporarily, and then counted that the earnings ratio of the Hong Kong stock market fell below eight times to a new low, Or use some buyback scale to prove that Hong Kong stocks are close to bottoming out. It is believed that the Hang Seng Index will rebound following hitting the low in October 2022.
I very much agree with Lin Yiming’s statement of “cherish life and stay away from Hong Kong stocks”. Recently he said: “For stock market investment, there is a very important concept: it is the factors that affect the trend of the stock market. Profitability has always ranked second, and the first is The flow of funds, if the funds want to leave, even if Tencent’s P/E drops to more than ten times and the P/E of China’s banks drops to three or four times, funds will still have to sell and the market will still fall.”
As for the reason why the funds are leaving, although he did not say it clearly, starting in July 2020, Hong Kong has gradually become a mainland city, and “one country, two systems” has been destroyed by those in power. This is not something that the cycle theory of the past can be applied to. It can only be said that today’s situation can be said to be benevolent and benevolent. This cannot be changed by “having full confidence in the prospects” as some financial officials say.
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