China and Hong Kong stocks lost nearly $5 trillion in 3 years — more than India’s market cap

China and Hong Kong stocks lost nearly $5 trillion in 3 years — more than India’s market cap

MUMBAI, MAHARASHTRA, INDIA – 2024/02/01: A circular metal emblem with words ‘This sign indicates buying of shares’ is seen near the pavement of a street near Bombay Stock Exchange (BSE) in Mumbai.

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Stocks in China and Hong Kong sold off a massive $4.8 trillion in market capitalization since 2021, which according to HSBC, is more than the value of the Indian stock market.

The statistic does not bode well for either China or Hong Kong, especially when the National Stock Exchange of India has only grown during the same period.

The NSE overtook Hong Kong Stock Exchanges and Clearing to become the fourth largest in the world in January, according to data from the World Federation of Exchanges, and is worth $4.63 trillion, making it the third largest in Asia.

This is indicative of how much traction Indian stocks have gained in the last few years, in contrast to declines in both China and Hong Kong.

Mainland China’s CSI 300 index has fallen for three straight years, closing out with declines of 11.4% last year. Hong Kong’s Hang Seng index performed even worse, with 2023 as its fourth consecutive decline ending the year 13.8% lower. Both were the bottom performers among major Asia-Pacific indexes last year.

China worries hit Hong Kong markets

Former HKEX CEO Nicolas Aguzin told Tech Zone Daily in March that lack of confidence in China, high interest rates and geopolitics are all impacting valuations and lowering the number of new listings on the exchange.

India: An investor favorite

Deals in India made up just 6% of IPOs globally in 2019, but Chan said the country now accounts for 27% as of the first quarter, “propelling it to the position of the world’s leading IPO market by deal volume.”

In contrast, EY data showed there were 30 IPOs in China’s A-share market in the first quarter, raising $3.4 billion. That’s the fewest number of IPOs and smallest proceeds since 2020. Hong Kong had just 10 IPOs during the three-month period and only two crossed $100 million in deal size, for the lowest proceeds since 2010.

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