Hong Kong Immigration focus on doing business in Hong Kong: Benefiting from the strong rally in A-shares, the Hong Kong stock market performed well overall in the first half of 2015. The Hang Seng Index rose by a cumulative 2,644 points, an increase of 11.2%. Analysts here believe that a series of measures to promote connectivity between the mainland and Hong Kong stock markets will continue to support the upward trend of Hong Kong stocks in the second half of the year.
Driven by a series of favorable policies from the central government, A-shares surged 32% in the first half of the year. Coupled with the smooth operation of the Shanghai-Hong Kong Stock Connect, increased trading volume, and U.S. economic data performing better than expected, Hong Kong stocks saw a strong rally in the first half. On June 30, the Hang Seng Index closed at 26,250 points, a cumulative increase of over 10% for the half-year.
In the first quarter, the Hang Seng Index mainly fluctuated between 24,000 and 25,000 points. Starting from the second quarter, the mainland successively introduced measures to strengthen the connectivity between the two stock markets, including allowing mainland public funds to purchase Hong Kong stocks through the Shanghai-Hong Kong Stock Connect, permitting mainland insurance funds to invest in Hong Kong Growth Enterprise Market (GEM) shares, and the mutual recognition of funds between the two regions, which set the stage for a major rise in Hong Kong stocks.
The high for the first half occurred on April 27, when the Hang Seng Index closed at 28,588 points, hitting a more than 7-year high. Trading volume also increased significantly, with daily turnover exceeding HK$100 billion becoming the new normal. The largest single-day turnover occurred on April 9, with a daily volume of HK$291.5 billion.
Entering June, affected by the sharp decline in A-shares and the worsening Greek debt crisis, the Hang Seng Index lost over 2,000 points, eventually narrowly holding the 26,000-point mark.
Hong Kong Exchanges and Clearing (HKEX) became the best-performing blue-chip stock with a cumulative half-year increase of 59.35%, followed by China Resources Enterprise, which sold its non-beer businesses to its parent company, China Resources Group, and issued a special dividend, rising 53.94% in the first half.
Looking ahead to the second half of the year, analysts believe the market will be influenced by factors such as mainland economic data performance, the timing of U.S. interest rate hikes, and whether the central bank will further cut interest rates and reserve requirement ratios. Although the Greek debt issue will cause short-term market volatility, its impact on the medium to long term is limited.
