Fund managers in Hong Kong have welcomed the easing of travel restrictions with mainland China put in place to curb the rise of Covid 19.
The shared border has been closed for almost three years but was finally reopened in recent days, with an initial quota of 60,000 per day in each direction.
Despite the limits on numbers, local managers are confident of a boost in investor sentiment in both China and Hong Kong.
“From an investment standpoint, we are bullish on the consumption/retail sector in the Hong Kong market, both in terms of discretionary and staples, as we expect rising visitors traffic will bring strong growth in revenues,” said David Townsend, managing director of EMEA business at Value Partners Group.
“While some of these stocks have already rallied on the news, there is likely to be further upside as consensus has yet to reflect this positive development.”
“With the opening up of China, business activities will become robust again, leading to stronger domestic consumption in the coming months,” said Ronald Chan, founder and chief investment officer at Chartwell Capital.
It may also help Hong Kong adress a recruitment problem in its investment industry. According to a 2022 survey commissioned by the Hong Kong Investment Funds Association, almost half (48%) of the surveyed firms said it was "extremely difficult" to fill vacancies with Covid-related travel restrictions in place.
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