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10 Most Undervalued Hong Kong Stocks To Buy According To Hedge Funds

Fahad Saleem
8 min read

In This Article:

In this article, we will take a look at the 10 most undervalued Hong Kong stocks to buy according to hedge funds. To see more such companies, go directly to 5 Most Undervalued Hong Kong Stocks To Buy According To Hedge Funds.

While the rest of the world is still debating whether or not financial markets are currently going through recession, Hong Kong happily reported that it has already come out of recession, with the country’s economy expanding 2.7% in the three-month period ending March 31, surpassing estimates of just 0.5% growth. It was the first quarterly gain in gross domestic product in more than a year. It’s also important to note that Hong Kong’s economy saw a decline of 4.1% in the last quarter of 2022.

The biggest impetus for this growth was the lifting of pandemic controls and full reopening of the economy. This caused a massive growth in retail sales and tourism. Bloomberg in a report quoted Hong Kong government figures which said visitor arrivals in Hong Kong jumped to 2.5 million in March, showing a whopping 68% growth from February. Government and independent analysts now believe Hong Kong will continue to see healthy growth for the rest of 2023.

Eric Zhu, an economist working for Bloomberg Economics, said in a note that based on the strong GDP growth in the first quarter, he was upping the 2023 forecast to 5.2%, up from 3.2% growth projection previously given in February.

“That would more than make up the ground lost in 2022 when GDP shrank 3.5%,” Zhu said.

What Makes Hong Kong Special?

Being a financial hub and home to some of the major banking companies’ headquarters, Hong Kong has always been the point of attention for international economists. Jitters in the global economy and financial system are directly felt in Hong Kong, whose strength and weakness lies in its reliance on external factors.

Thomas Helbling, the IMF’s deputy director for the Asia and Pacific department, said during a briefing on May 2 that Hong Kong is expected to gain from the rebound in demand in the region. However, Helbling said IMF is “most worried about external” risks as the global economy “has been slowing.” Helbling also said that further tightening of credit in the US and Europe could also hit Hong Kong through “trade channels.”

Hong Kong's Dramatic Comeback

According to a report by investment banking firm Natixis, Hong Kong lost a whopping $27 billion in potential gains due to COVID-related restrictions and overall effects of the pandemic. Earlier this year, the firm said in a report that had the pandemic not happened, Hong Kong’s economy would have grown an average annual 2.8% over the past three years.

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