MUMBAI, MAHARASHTRA, INDIA – FEBRUARY 1, 2024: A circular metal sign reading “This sign indicates the purchase of stocks” is placed near the road pavement near the Bombay Stock Exchange (BSE) in Mumbai. emblem can be seen.
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Chinese and Hong Kong stocks have sold a huge market capitalization of $4.8 trillion since 2021, which is more than the value of the Indian stock market, according to HSBC.
This statistic does not bode well for either China or Hong Kong, especially considering that the National Stock Exchange of India has only just grown in the same period.
The NSE overtook the Hong Kong Stock Exchange and Clearing in January to become the world’s fourth-largest stock exchange, with a value of $4.63 trillion, making it the third-largest in Asia, according to data from the World Federation of Exchanges.
This shows how much traction Indian stocks have gained over the past few years, in contrast to declines in China and Hong Kong.
Mainland China’s CSI 300 index has fallen for three consecutive years, ending last year with an 11.4% decline. The performance of Hong Kong’s Hang Seng Index worsened further, ending 2023 with a decline of 13.8%, marking the fourth consecutive year of decline. Both stocks ranked last among major indexes in the Asia-Pacific region last year.
China’s struggling real estate sector is a source of concern for investors, and it’s also affecting Hong Kong. Many Chinese real estate stocks, such as Evergrande Group and Country Garden, are listed on the Hong Kong Exchange.
China has set a growth target of 5% for 2024, but analysts are skeptical that the world’s second-largest economy will reach the target. S&P Global Ratings last week predicted China’s GDP growth rate would be 4.6% in 2024, slower than the 5.2% growth rate in 2023.
“Our forecasts factor in continued weakness in real estate and modest macro policy support. “Deflation remains a risk if the government responds by further stimulating manufacturing investment,” he wrote to clients. Note.
Former Hong Kong Stock Exchange CEO Nicholas Aguzin told CNBC in March that a lack of trust in China, high interest rates and geopolitics were all impacting valuations and the exchange’s new listing. He said the number is being reduced.
Indian stocks rose amid growing optimism about India’s growth. The country’s benchmark Nifty 50 index has risen for eight consecutive years, registering a 20% rise in 2023.
The HSBC study also revealed that the National Stock Exchange of India has overtaken the Shanghai Stock Exchange to become the world’s second-largest stock exchange in terms of monthly trading volume. However, it still fell short of the Shenzhen Stock Exchange, which took the top spot.
Stock exchanges in India also saw the highest number of initial public offerings in 2023, according to a study by EY India. This is despite the sluggish IPO environment, especially in Asia. According to EY, there were 220 IPOs in India last year, raising $6.9 billion in proceeds. This represents a 48% increase in trading activity compared to 2022.
“While the Chinese market has slowed significantly, India has been an outstanding performer,” George Chan, global IPO leader at EY, said in a separate research report.
In 2019, only 6% of global IPOs were traded in India, but as of the first quarter, the country now accounted for 27%, “catapulting it to the position of the world’s leading IPO market by volume. “There are,” Chan said.
In contrast, there were 30 IPOs in China’s A-share market in the first quarter, raising $3.4 billion, according to EY data. This is the lowest number of IPOs and lowest revenue since 2020. Hong Kong had just 10 IPOs in the three-month period, with only two deals exceeding $100 million in size, and revenues the lowest since 2010.
