Message from Coach
On this week’s market summary:
📍1. JPMorgan, Morgan Stanley and Goldman Sachs are set to delist 500 structured products from Hong Kong’s stock exchange, as the fallout from President Donald Trump’s executive order barring investment in companies with alleged links to China’s military widens. During his final days in office, Mr Trump has sought to crack down on Beijing before Democratic president-elect Joe Biden is inaugurated later this month. In addition to banning the purchase of shares of dozens of Chinese companies believed to be tied to the People’s Liberation Army, the outgoing president has also moved to restrict transactions with Chinese payment applications including Alipay, We Chat Pay and Tencent’s QQ Wallet.
📍2. Chinese money is pouring into Hong Kong’s beaten-down stock market, highlighting the growing sway of mainland traders as political turmoil threatens to undermine the city’s status as a global finance hub. Mainland Chinese investors’ holdings of Hong Kong-listed stocks bought through market link-ups with Shanghai and Shenzhen climbed to a new all-time high of $235.7bn on Tuesday, according to Financial Times calculations based on Bloomberg data. On Monday, mainland purchases of Hong Kong shares via the Stock Connect schemes hit a new daily record of $2.5bn. That flurry of purchases arrived on the heels of Trump administration sanctions targeting top Chinese tech groups, many of which are listed in Hong Kong.
📍3. It is, to put it mildly, counterintuitive. In the midst of a global pandemic and one of the steepest recessions ever, mainstream investment markets are very fully valued by historic standards. In short, investors are not being adequately compensated for risk in an uncertain world. So it is important to be clear about the nature of financial risk in the year ahead. When market valuations are elevated there is always a potential vulnerability to negative shocks. Among the obvious triggers are possible resurgences in the coronavirus, dips in economic activity and an escalation of bankruptcies in troubled sectors such as retail, hotels, transport and property.
📍4. In just five years, Hong Kong property tycoon Pan Sutong has gone from ranking among Asia’s wealthiest people to having his company’s flagship skyscraper seized by creditors chasing more than US$1 billion of debt. It’s a swift fall from grace for Pan, 57, who was Asia’s fourth-richest man in 2015 with a net worth of US$27 billion, according to the Bloomberg Billionaires Index. But after shares of his Goldin Financial Holdings plunged and with most of his properties locked up as collateral for loans, he has fallen off the list of the world’s 500 wealthiest people.
One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” .
Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics.
Take a look of the summary and WhatsApp us in the group if you have questions.