The 'Big Short' Burry: Now is an Excellent Time to Bottom-Fish in Hong Kong Stocks
The article discusses growing optimism towards Hong Kong stocks, led by prominent investor Michael Burry of "The Big Short" fame. Burry recently stated it is an "excellent time" to find cheap stocks in the Hong Kong market. His bullish view is based on the prediction that as the global AI chip stock frenzy cools, capital will flow out of markets like South Korea and Japan and seek undervalued opportunities, positioning Hong Kong as a potential beneficiary.
Supporting this view, Goldman Sachs' Asia equity capital markets head, Wang Yajun, argues the Hong Kong market has already entered the AI era, but major indices have not yet reflected this reality. He points to active AI-related IPOs and transactions as evidence of underlying market vitality, contrasting with the weak performance of key indices like the Hang Seng.
Data highlights Hong Kong's underperformance: the Hang Seng Index is down about 7% year-to-date, while markets in South Korea and Japan and semiconductor ETFs have seen significant gains. This disparity is seen by Burry and others as creating a valuation gap and a potential buying opportunity.
The article notes Burry has acted on his view by increasing holdings in Chinese e-commerce firm JD.com. Morgan Stanley has also recently advocated buying Hong Kong stocks, citing positive corporate earnings expectations.
However, challenges remain, including persistent concerns over Chinese consumer spending and e-commerce profitability, which continue to weigh on the market. The divergence between weak index performance and strong activity in specific sectors like AI presents both opportunity and complexity for investors looking to capitalize on Hong Kong's potential turnaround.
marsbit07/17 09:02
