Originally featured in Hong Kong Economic Times. Full article here (Traditional Chinese and for subscribers only).

Broadridge expects Hong Kong's recovery to be positive for Asian investors
Hong Kong Economic Times
By Danny Ip
24 June 2024

After bottoming out at the beginning of this year, Hong Kong stocks have rebounded significantly in recent months, and market confidence in the China-Hong Kong market has increased. Ofir Gefen, Head of International Sell-Side Sales at Broadridge Financial Solutions, is cautious about the China market, but believes that clients' optimism has increased, and that with uncertainty persisting in the external markets, it is expected that there will be changes in the direction of capital flows in the market. The U.S. remains an uncertain market.

U.S. uncertainty affects capital flows

He pointed out that Asian investors were generally worried about the market at the beginning of the year, but had become more optimistic. He also mentioned that turnover in the Hong Kong and China markets had declined at the beginning of the year as investors were concerned about the direction of the rest of the year, but now, after talking to clients, he feels they have become more optimistic.

However, he remains cautious on the China market, "mainly due to two reasons, firstly, the geopolitical tensions and the restrictions around the semiconductor industry are still a concern. The real estate market is another concern. While the Mainland is taking measures to support the real estate market, investors are still concerned, and the widening gap between Asian stocks and Hong Kong's H-shares in recent months also reflects investor sentiment. China is a large economy that produces a lot of goods and services, and I believe no one is going to withdraw from this market," he said.

He added that some of his clients' recent interest in Hong Kong remains very positive, and he himself believes that there is still a chance for the Hong Kong market to recover. Also, this is an election year and there is still a lot of uncertainty in the US market, so capital flows may continue to change.

Asked about the impact of artificial intelligence (AI) on the bank's fintech business, which has become increasingly popular in recent years, Ofir noted that AI has an impact everywhere, including on investors in Hong Kong: "In the retail market, AI can help clients find the types of stocks and bonds that are better suited to their needs, and this is becoming more common. Institutional investors, on the other hand, tend to be more conservative due to regulatory constraints and don't want to get involved in any risk, but AI is the trend and the impact is expected to build over the next few years," he said.