Hong Kong's battered stocks may be on the cusp of a historic buying opportunity, with eleven straight weeks of protest and a protracted trade war pushing equity valuations to 'compelling' lows.
The Hang Seng index , the most widely-quoted gauge of local stocks, is struggling through its worst quarter since 2015.The Hong Kong market also slid in July, with sentiment weakening amid concerns over a global economic slowdown.Hong Kong's battered stocks may be on the cusp of a historic buying opportunity, withand a protracted trade war pushing equity valuations to "compelling" lows.
"The opportunity has arisen by the large decline in share prices there," Mark Matthews, managing director and head of research at Julius Baer, told CNBC's "Capital Connection." "We looked back to 1973 — we found that only 10% of the time has the Hang Seng index traded below 10 times," Matthews said, referring to Hong Kong's average price-to-earnings ratio of around 10.46 times — its lowest in several years. The price-to-earnings ratio is an important metric used by traders to gauge the value of a stock or an index.
"You could argue the composites of it have changed a lot since 1973, but actually, I would say, that makes the case more compelling.", the most widely-quoted gauge of local stocks, is struggling through its worst quarter since 2015. The index fell to a seven-month low last week and has erased its gains for the year.
The Hong Kong market also slid in July, with sentiment weakening amid concerns over a global economic slowdown. The pullback has become particularly apparent in Hong Kong's heavyweight property sector, where HSI-listed stocks fell 5.2% last month.
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