Review Of Hong Kong Stock Market In The First Half Of 2023

As of July 10, 2023, the Hang Seng Index has fallen 6.58% year-to-date, the H-share Index has fallen 7.01%, and the Hang Seng Tech Index has fallen 4.45%. During the same period, the Shanghai Composite Index rose by 3.70%, the Shenzhen Component Index fell by 0.66%, and the ChiNext Index fell by 6.30% in the A-share market; in the US stock market, the Dow Jones Industrial Average rose by 2.40%, the S&P 500 Index rose by 14.85%, and the Nasdaq Index surged by 30.76%. Among major global stock markets, the performance of the Hong Kong stock market was relatively weak in the first half of the year.

In terms of industries, as of July 10th, only the energy and telecommunications sectors have recorded gains among the 12 major industries in the Hang Seng Index. The energy sector has risen by 13.49%, and the telecommunications sector has risen by 16.45%. Among them, 10 industries recorded a decline, with essential consumption falling by 16.47%, real estate and construction industry falling by 19.91%, and healthcare industry falling by 23.08%, leading the decline.

From the perspective of trading volume, in the first half of 2023, the average monthly trading volume of the Hong Kong stock market decreased by 12.36% compared to the same period last year.

Hang Seng Index Staged Performance

In stages, the Hong Kong stock market’s performance in the first half of the year can be divided into three stages. Stage 1, January 3rd — January 27th, 16 trading days, Hang Seng Index surged 14.70%. At that time, the market mainly continued the upward trend since November 2022, mainly due to the support policies for the real estate market (such as the “three arrows”) and the comprehensive relaxation of epidemic prevention and control.

In the second phase, from January 30th to March 20th, a total of 36 trading days, the Hang Seng Index fell by 16.26%, wiping out all the gains between January 3rd and January 27th. At that time, the market had already entered the “overbought” zone after a short-term rapid rise, and it was driven by the policy market to enter the fundamental market after the short-term surge in old economy blue-chip industries such as finance and real estate brought about by real estate support policies; thirdly, the Fed raised interest rates.

In the third phase, from March 21 to July 10, the Hang Seng Index fell by 2.74% over 74 trading days, forming a box-shaped oscillation or “inverted W” pattern. During this period, the “Zhongtegu” market drove significant increases in industries such as finance, telecommunications, electricity, and oil and gas. However, after May 9th, the “Zhongtegu” market experienced a certain degree of decline. The Federal Reserve raised interest rates for the second time this year. There was a banking crisis in Europe and the United States. There was a market for artificial intelligence.

Performance Of Hong Kong IPO Market In The First Half Of 2023

In the first half of 2023, there were only 29 initial public offerings in the Hong Kong stock market, with a total financing of only HKD 17.8 billion. The performance of the Hong Kong IPO market was sluggish last year, but it has slightly improved in the first half of this year, with the number of IPOs and fundraising amount increasing by 45% and 0.6% respectively.

Among the publicly offered new stocks, nearly half of the IPOs are priced at the lower end of the offering price, with only 3% of new stocks using the upper limit of the issue price. 56% of new stocks experienced a first-day drop, with an overall IPO underperformance rate of 48% by the end of the first half of 2023.

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