The summer vacation seemed to have penetrated the stock market in Hong Kong. The summer lull sent trading volumes to its lowest point Monday since September 4, 2012. The amount of shares changing hands was only HKD38.49 billion.
Trading during summer usually slowed down. However, the situation this summer was worsened by fading growth in China. In addition, according to Ben Kwong, chief operating officer at KGI Asia, investors needed "some story to buy or to sell. Right now, there is no story...the market as a whole is a non-event."
Investors were looking for greener pastures elsewhere. Investors were looking to the US and Japan with their money. This has hurt the liquidity in Hong Kong.
In the wake of the steady fall of trading volumes in the city, Hong Kong Exchanges and Clearing Ltd. was downgraded by BNP Paribas from "reduce" to "buy." In addition, the stock exchange operator's target price decreased 35% to HKD97.11 because of slow turnover and weak IPO outlook.
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