A Morgan Stanley analyst has claimed valuations for companies listed on the Hong Kong exchange will soar on the back of new government regulations, which allow domestic investors to buy into the country's market for international stocks for the first time.
Jerry Lou, senior China analyst at Morgan Stanley said "the new regulations will mean that for the next couple of quarters Hong Kong-listed companies will enjoy higher valuations, as some of the liquidity trapped in the Shanghai and Shenzhen domestic markets is transferred to the international bourse. We believe the move will be near-term liquidity positive for the Hong Kong stock market â especially for its listed Chinese companies, which are naturally hedged against renminbi appreciation."
