It’s business as usual on Hong Kong’s busy streets, but inside the numerous office towers in the city’s Central district business couldn’t be slower. According to a new report in the South China Morning Post, Hong Kong’s large investment community has become “bored” with the performance of the region’s stock exchange.
Hong Kong’s Hang Seng Index has remained in a 2,000-point trading range for the last month, causing one investor to say that “you could close the Hong Kong market and no one would notice.”
Andy Maynard, global head of trading and execution at Crédit Lyonnais Securities Asia (CLSA), said: “February has gone incredibly flat incredibly quickly, and the Hang Seng Index is extremely range-bound. My clients are sitting on their hands… we are in a state of real boredom.”
Over the last two months, Hong Kong’s Hang Seng Index has only closed outside of a 21,500 to 23,500-point range 21 per cent of the time. The market’s predictable and slow performance is unlike that of anywhere else in the world, with share prices in the United States and Europe growing at stable rates recently.
Last week, the S&P 500 Index reached a record high, as did the Nasdaq. Investors in Hong Kong have pointed to Mainland China as the reason for the sluggish financial performance in Hong Kong’s markets, noting that many investors have struggled to accurately assess the mainland’s economic performance.
Mainland China is, of course, experiencing a period of economic difficulty. The large market’s banking system has run into speed bumps in the last few months and many economists predict that China may, for the first time in years, fail to achieve its large and ambitious growth targets.
For Hong Kong’s many eager investors, the next month could be another period of stable economic performance, predictable outcomes and boredom.
