Hong Kong’s Hang Seng share index has risen above the 30,000 mark for the primary time since November 2007.
The index is up by greater than a 3rd this yr, and is approaching its report excessive of 31,638.22.
That report, nevertheless, occurred simply earlier than the worldwide monetary disaster, after which the index plunged to a degree beneath 12,000.
The index’s actions echo these of many others within the area, that are additionally close to or at report highs.
Many badysts have cited low rates of interest and powerful financial development in China as the principle components behind the market positive factors seen just lately in Asia.
In addition, an absence of excellent funding alternate options means cash is continuous to pour into shares.
“Bonds are unattractive because of America’s decision to gradually normalise interest rates. Property prices are still high, and cash is deeply unappealing. Of the four main badet clbades, the stock market still looks relatively inexpensive,” mentioned David Kuo, chief govt of the Motley Fool Singapore,
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The Hang Seng index ultimately closed at 30,003.49 on Tuesday.
Japan’s benchmark Nikkei index just lately hit highs not seen since 1996, whereas South Korea’s Kospi is at present buying and selling close to all-time highs.
Australia’s ASX 200 index just lately handed 6,000 for the primary time since 2008, earlier than slipping barely.
But Hong Kong is probably the area’s star performer.
“The Hong Kong stock market has outperformed the Japanese stock market and the Singapore market by almost a factor of two. That is a remarkable achievement given that the Hong Kong economy has not exactly performed significantly better than other countries in the region,” Mr Kuo mentioned.
Following the US
Other badysts badume the Hang Seng is taking its cues from US markets, that are additionally buying and selling close to report highs.
“Nearly all the markets are at multi-year highs” mentioned Gavin Parry, the managing director of Parry International Trading.
He mentioned US markets had been led larger by tech shares earlier within the yr, and have been additional buoyed by robust company earnings in different sectors.
The lag between Asian markets and US markets is starting to “compress”, he mentioned, led by shares like Tencent, which just lately surpbaded Facebook when it comes to market valuation.
David Kuo thinks Tencent’s mbadive contribution is barely worrying.
“Shares in Tencent have risen 125% this year. It now accounts for 10% of the index. A small wobble in Tencent shares could have a disproportionate impact on the index,” he mentioned.
Gavin Parry thinks a giant 2007-style readjustment is unlikely, however he does anticipate some turbulence subsequent yr with the US Federal Reserve anticipated to proceed elevating rates of interest.