Zhang Huaqiao: What Exactly Is The Investment In Hong Kong Stocks?

For mainland investors, from your money to Hongkong, the point of your consideration is no longer "whether it is good for Hong Kong stocks or good for A shares", but "comparison between Hong Kong stocks and Turkey, the United States and Malaysia".

I heard that Hong Kong and Hong Kong and Shenzhen Hong Kong through the money only through the "original road back", "closed operation", I do not understand why we want to torture ourselves like this.

The proud Chinese often say that China is the second largest economy and the largest trading nation in the world, but why do we need to implement the foreign exchange control over "suspension bridge"? We Chinese people are brave enough to speak hard, but we are afraid of Soros.

After 38 years of reform and opening up, we have the total amount of economy, still the thinking of the island nation.

Once your money is in Hongkong, you have become a "foreigner", at least in the economic sense.

Before you invest in H-shares and red chips, you have to consider the exchange rate.

If you want to invest in H-shares and red chips, then the rise and fall of the Hong Kong dollar will not be important because the underlying assets and income of H-share and red chip companies are basically RMB.

If Hong Kong dollar falls by 50% in the next year, the price of H-share and red chip companies should be doubled if Hong Kong dollars are quoted, assuming that other conditions remain unchanged.

Similarly, if the renminbi depreciates against the Hong Kong dollar, then the share price of H-shares and red chips will decline correspondingly.

So, if you buy H-shares and red chips, you will still buy basic assets in China.

You have not evade the issue of RMB depreciation for a long time.

Your only advantage is that Hong Kong stocks and red chips are much cheaper than A shares.

The RMB can not be depreciated. In the short term, the government can control it, but it can not be controlled for a long time.

In order to avoid the long-term devaluation of the RMB, you must consider the problem as a real foreigner: over the past year, the RMB has depreciated by 10%.

If the government is not dead, the degree of depreciation may be even greater.

In the next five years (or ten years), if the RMB depreciated 3-5% every year (which is impossible), then, is there any investment value for H-shares and red chips? If you think about the other problems of Chinese Enterprises: economic bubble, false accounts, corporate governance, cyclical, and the lack of owners of state-owned enterprises, you will be far away.

In a sense, the A share market is only an isolated island, and it is not part of the world capital market.

Capital can not freely enter and leave China. Foreign investors can not freely buy and sell A shares. What do you mean by comparing the A share market with other countries (valuations)?

Looking at the world, where are the good investment targets? The stock market in Europe and America has been rising basically for eight years since the subprime crisis.

There has been little oil in the traditional valuation method.

However, many people argue that "because the global interest rate level will remain at a low level for a long time, the valuation of the western stock market is not high".

That's a bit of a truth, but we forget that the premise of long-term low interest rates is the global economic downturn and the lack of investment opportunities.

Since the economy is sluggish, the profit prospects of enterprises will also be very bad.

Values will also be lowered accordingly.

In any case, there is not much oil in the western stock market, and the risk of falling is not small: "the valuation is too full" and can not cope with any mistakes.

It is hard for the domestic people to pfer hard money overseas and how to invest. First of all, I think you should be lucky.

You have a little "overseas configuration".

But preserving value is more important than increasing value.

If the RMB does not depreciate in real terms in the next ten years (the growth of China's money supply by 13%), it will not be able to melt bad corporate debts.

Think about how serious this problem is! Your overseas assets can also help you.

With this idea, you will have more investment opportunities.

One is the currencies that have depreciated sharply in recent years, such as Russia's rouble, Brazil's currency, South African currency, Egypt's currency, or better, their companies listed in local, Hongkong and European and American countries.

If the commodity cycle is to come back (sooner or later), those currencies will go up, and the share prices of these companies will also rise.

You will get double benefits.

There are many similar ETF and bond funds.

Compared with physical assets (including real estate), the currencies of all countries in the world are depreciating, but in my view, the depreciation rate of the renminbi will probably be faster in the future.

Note that it is not a bad thing to hold foreign currency in the form of deposit.

But buying bonds in these countries is better.

The two is the currencies of Southeast Asian countries and all kinds of stock debt funds.

The same token.

These countries have great potential for growth and political stability.

The three is a large number of high interest bonds priced in US dollars, issued by Chinese companies, other Asian African countries, and a large number of bond funds.

If the average annual 2-4% yield is plus the exchange rate advantage, it is already very good.

Investment in Hong Kong stocks must be compared with the above opportunities.

My view is that Hong Kong stocks are not so attractive.

Well, too many.

If your money is only through Shanghai and Hong Kong, the so-called "closed operation" of Shenzhen Hong Kong Tong, then I have nothing to say.

Then buy it.

However, we must pay attention to five points:

(1) the valuation gap of A+H does not constitute the reason for buying H-shares.

As long as China has foreign exchange control, and even after the complete cancellation of foreign exchange control in China, the difference between the A and H shares of the same company will remain for a long time, because the two stocks are actually not interchangeable: Your H shares can not be converted into A shares, and vice versa.

Many regulatory practices in China are painful.

I can only say so.

(2) although the stock market is the common pursuit of the people of all continents, but in Hongkong, speculators (retail investors) have a very small proportion. Over the centuries, they have been massacred in batches, so the remnants are comparatively calm.

Let's not arbitrarily expect them to follow suit.

(3) the largest shareholder in Hongkong market is the fund, foreign.

。

If Hong Kong and Shanghai pass through, Shenzhen and Hong Kong can do a lot of speculation, they can sell them to you.

Leave.

Your receiving capacity is too limited.

They can not hold H-shares or red chips at all.

For the vast majority of foreign funds, the world stock market without Chinese elements can also be very complete.

Therefore, the people of Shanghai and Hong Kong and Shenzhen and Hong Kong must be loyal to the fundamentals and invest only in H-shares and red chips that can be held for a long time. Otherwise, we will become "playing for ourselves".

In Hongkong, breaking, breaking, and even "breaking" happen every day.

(4) if the money of Shenzhen Hong Kong Tong is in full swing, it may push Hongkong's Listed SMEs to a very high position.

Then, please do not forget that the A share market in 2015 did not listen to government instructions.

In order to protect myself, I suggest that you invest in companies with "moat" and performance.

If the stock market falls, you haven't run away, you can afford it.

Avoid the concept stocks.

Avoid stocks that are too expensive.

(5) since the early 80s, I have been selling macroeconomics to the central bank and investment banks for a long time.

But I confess frankly that the stock market does not believe in economics.

At least Hongkong's stock market does not believe in economics.

GDP grows year after year, and stock market is associated with it.

Money supply increased year by year, and stock market did not respond.

The stock market doesn't even listen to the government's words.