The Hong Kong stock market has surpassed Japan to the world’s third largest, behind only the U.S. and China.
The benchmark Hang Seng Index has soared by almost 17% since the start of 2019, adding $937 billion to the market cap for stocks trading in the city, compared to $371 billion for Japan, as the city-state’s standard crossed into bull-market area last week, as a rally in mainland-traded ‘A’- shares has filtered over the border to Hong Kong.
According to Bloomberg, expectations that China’s economic downturn will bottom out prior to the start of the second half of 2019 have assisted in lifting its stock market, still the biggest in Asia, following last year’s remarkable drop.
The last time the Hong Kong market was higher than Japan’s was nearly four years ago.
China remains far above the rest, the biggest equity market in Asia with a market cap of $7.6 trillion, while the United States still holds the top spot globally, with a market cap of an astonishing $31.3 trillion.
Internet giant Tencent Holdings Ltd. has actually been the primary driver of Hong Kong’s rise with a 22 percent gain this year.
Both markets were lower Wednesday, as an economic outlook from the International Monetary Fund restored worry about a slowdown in international growth and after the U.S. threatened tariffs on the European Union.
Hong Kong stock exchange lifted by trade deal optimism
Trump stated recently that a deal was most likely “four weeks” away but since conversations began earlier this year to end the nine-month trade war, the fish line has consistently slid further into the future.
China and the U.S. have, nevertheless, crossed another landmark, with the two sides agreeing on a system to police any agreement, including brand-new enforcement offices, sparking optimism in world markets, including Hong Kong.
The enforcement scheme and the team behind it have been a significant hurdle to overcome, with China worried that policing of its policies by United States authorities would be a violation of sovereignty.
The contract, however, will likewise permit China to monitor U.S. behavior, a mutual acknowledgment which authorities said revealed determination from both sides to reach a trade deal.
U.S. Treasury Secretary Steven Mnuchin explained, “We’ve pretty much agreed on an enforcement mechanism, we’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters.”
China and United States have entered what has actually been described as the final phase of intensive discussions to reach a deal, and while the two countries are still likely to reach a contract, a good deal takes some time.