Hong Kong stocks want to do what?

Monday’s opening was the Hong Kong stock plunge to piss.

The valuation of such a low Hong Kong stocks, actually still plummeting, Hang Sang Index all the way down to 16300 points, Hang Sang Technology Index is all the way down to 3100 points below, and always stable as a dog Hang Sang China Enterprises Index, also all the way down to 5500 points.

Almost all Hong Kong stock index valuations are on par with, or, even lower than, the lows of 2008 during the global financial crisis (the lows of the 2008 global financial crisis for Hong Kong stocks were seen in October 2008 and February-March 2009).

The valuation of the Hang Sang Composite Large Cap Index, which essentially fell back to its lowest valuation in March 2009

The valuation of the Hang Sang Composite Midcap Index, which fell to its lowest valuation since March 2009

The valuation of the Hang Sang Composite Small Cap Index, which fell to its lowest value since March 2009

What a godsend, a truly –

Irrational decline

In a stock market data software, see about the overall valuation of the 22 existing indices of Hong Kong stocks, using PE-TTM (dynamic price-to-earnings ratio), PB (price-to-net ratio) and price-to-sales ratio (dynamic price-to-sales ratio) respectively.

The light green box in the table below represents the current valuation at an extremely low level, and the two numbers inside, one is the valuation and the other is the percentile where it has been historically – obviously, whether it is PE valuation, or PB valuation, or PS valuation, the stock market in Hong Kong right now, is considered to be at an extreme level, almost all in the green.

Even though Hong Kong stocks experienced a substantial rally in the afternoon, as of the close of trading, in addition to the six indices involving innovative medicine, biotechnology, and Internet technology, the remaining 16 stock indices have dividend yields, all of which are above 4% – with four indices having dividend yields close to or above 9%: the

The Hang Sang High Dividend Yield Index, with a dividend yield of 9.81%.

The Hang Sang Mainland China Enterprises High Dividend Yield Index, with a dividend yield of 8.7%.

Hang Sang Hong Kong Stock Connect High Dividend Low Volatility Index, with a dividend yield of 9.3%

Hang Sang Hong Kong Stock Exchange High Dividend Yield Index, dividend yield 8.99%.

Speaking of dividend yield, I remembered that last time I told you about the high dividend yield index funds in the article “Hong Kong stocks are outrageous”, the closing time, but it seem to have not hit a new low.

Someone said, now Hong Kong in order to maintain the linked exchange rate, foreign exchange reserves are rapidly decreasing, if not, the Hong Kong dollar may be decoupled from the U.S. dollar, pegged to the Yuan, Hong Kong stocks this much danger ah!

If the Hong Kong dollar is decoupled from the U.S. dollar, under normal circumstances, of course, is certainly not good for Hong Kong stocks, but the problem now is that if there is no this decoupling expectation, Hong Kong stocks and how can give you fall so low it?

In other words, this expectation has been completely Price in – in my personal opinion, not only Price in, but also over Price in.

Let us not discuss, in the case of Hong Kong’s foreign exchange reserves remain at an all-time high, whether the Hong Kong dollar will be decoupled from the U.S. dollar in the end, we may assume the worst: the Hong Kong dollar will be decoupled from the U.S. dollar.

The Hong Kong dollar will just be decoupled from the US dollar and pegged to the RMB.

This is of course very unfavorable for foreign investors, as they may face the danger of being “shut down”, but for those of us who hold RMB and are in the country – we ourselves are the betting dogs of the RMB market. If the Hong Kong dollar is really linked to the Yuan, those stocks in Hong Kong, almost all have to do with the same shares and the same power, right?

If the Hong Kong dollar is really pegged to the RMB, don’t you think the prices of Hong Kong stocks will move closer to the A-shares?

So, with the current price difference between Hong Kong and A-shares, how much would Hong Kong stocks have to rise?

As long as you invest in the stock market, at any time, undervaluation is the way to go, everything else is for nothing!

If the valuation is so low as Hong Kong stocks, as a Chinese investor who knows all the similar companies in A-shares, you still say, I dare not buy, I dare not invest, then I really think, in addition to saving in the bank, in fact, you are not suitable for any investment.

 

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