Investment guru Cho Chi-ming has advised a cautious stance over the Hong Kong stock market, urging the public not to get carried away by the recent uptrend in equity prices.
Cho, chief consultant to Hong Kong Economic Journal, warned that the soon-to-be launched through-train for cross border stock transactions by Hong Kong and Shanghai individuals has already been factored into equity valuations.
Despite the market bounce, H shares of several Chinese firms still trade at a discount compared to their A shares on the mainland, which reflects concerns about corporate governance standards in China, Cho said, according to the Hong Kong Economic Journal.
Cho holds a negative view on the stock market prospects in the rest of the year.
The Dow Jones Industrial Average and the Russell 2000 index have shown a decoupling trend lately, heralding the loom of a peak in the US stock markets and a correction that may lead to a 10 percent drop. It remains to be seen what impact such a correction will have on the Hong Kong stock market, Cho said.
Cho also noted that the Hong Kong property market is close to peak, given that the current uptrend was rooted over a decade ago in 2003.
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