The "NASDAQ of the East" Has Rough First Day

Issue 29

07.27.20 - Trading on Hong Kong's new technology index got off to a shaky start recently, while stocks globally were muted based off of concerns about a resurgence in the COVID-19 pandemic that could cause the economic recovery to falter.

The Hang Seng TECH Index (dubbed the ‘Nasdaq of the East’) momentarily jumped 2.2% in early trading and was a top performer in Asia for a brief moment but was short lived as that course reversed and the index fell down to 0.8%.

The debut for the index fund came a week after Hang Seng Indexes (HSI) announced its creation. HSI has embraced an increasing level importance as large tech companies such as Alibaba and NetEase — all of which trade in the NYSE — have turned to the city of Hong Kong for secondary listings. Ant Group, the company behind the Chinese mobile payments business Alipay (covered in last week’s newsletter), recently announced last week that it has chosen both Hong Kong and Shanghai for its initial public offering (IPO).

Investors are cautious and are continuing to monitor the progress of the coronavirus pandemic worldwide, while simultaneously keeping tabs on tensions between the United States and China. The US consulate in Chengdu was forced to close recently after Beijing ordered it to shut. The US government also suddenly ordered the closure of China's consulate in Houston, Texas.

Source: New York Times