'More efforts needed to revive stock market sentiment'
Financial analysts on Monday said that a pledge by the nation’s securities regulator to offer support in enhancing Hong Kong's role as a global financial hub can provide a short-term boost to market sentiment, but more measures are needed. Shares on the Hang Seng Index and Tech Index enjoyed a bump after the China Securities Regulatory Commission (CSRC) on Friday said it would facilitate Hong Kong listings by leading Chinese firms, and loosen rules on stock trading links between exchanges in the SAR and on the mainland. Under the measures, the scope of eligible exchange-traded funds (ETFs) via the links will be widened, and real estate investment trusts (REITs) will be included for the first time. James Wong, chief executive of Cathaysia Securities, said the latest move by Beijing had brought a “positive atmosphere” to local stock markets. However, the securities specialist cautioned that such measures may only help in the near future, and that it may take “many more policies” to really improve sentiment. “All of these [measures] are good. But, for example, the number of ETFs that are allowed is less than 10. I really don't know how much capital flow that 10 ETFs can bring to the Hong Kong market,” he noted. He also noted that there were only 12 initial public offerings in Hong Kong in the first quarter, and described the figure as “scary”. Wong expressed the hope that authorities will make it easier for mainland companies to list here. Meanwhile, Kenny Wen, head of investment strategy at KGI Asia, said that Monday's rally came on the back of a combination of factors. “The sentiment has already improved over the past two months,” said Wen, noting that while the city’s bourse may be able to see more capital inflow following Beijing’s announcement, the “game changer” lies on fundamental factors. “It depends on many more factors, including China's economic development and whether the US Federal Reserve will cut interest rates in June or July. These fundamental factors may be more important for foreign or mainland capital - whether they want to come to Hong Kong and buy Hong Kong stocks,” Wen said.