Favorable liquidity in HK markets expected to continue

April 24, 2015 09:58
Grace Tam (right) said fund inflows from the mainland could continue for the next 12-24 months. Photo: HKEJ

The Hong Kong stock market is expected to continue benefiting from plenty of liquidity flowing from mainland China as the country liberalizes its capital account, Grace Tam, global market strategist at JPMorgan Asset Management, said.

The favorable fund flows are likely to last for the next 12-24 months, Tam was quoted as saying by the Hong Kong Economic Journal in a report Friday. 

Foreign mutual funds that have rated Chinese equities "underweight" have to raise their holdings to avoid any disappointment in their funds' performance compared with the benchmark Hang Seng China Enterprises Index, which surged 10 percent over a short period of time, Tam said.

The valuation of H shares is still lower than that of their mainland counterparts and should support further upward adjustments, she said.

But Hong Kong stocks could be volatile, subject to external conditions in the United States, Greece and mainland China, Tam said. 

Translation by Vey Wong

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