China and Hong Kong sold nearly $5 trillion, equivalent to more than India's stock market

Shares in China and Hong Kong have been sold at a whopping $4.8 trillion market value since 2021, which according to HSBC, is more than the value of the Indian stock market.

This statistic does not bode well for either China or Hong Kong, especially since the Indian National Stock Exchange witnessed growth during the same period.

It overtook the Hong Kong Stock Exchange and Clearinghouse to become the world's fourth-largest stock exchange in January, according to data from the World Federation of Stock Exchanges, and the value of all listed stocks combined is $4.63 trillion, making it the third-largest exchange in Asia.

This indicates how much momentum Indian stocks have gained in the last few years, in contrast to the declines in both China and Hong Kong.

Mainland China's CSI 300 index has fallen for three straight years, closing down 11.4% last year. Hong Kong Hang Seng Index It fared even worse, as 2023 was its fourth straight decline, and it ended the year down 13.8%. Both were among the lowest performers among major Asia-Pacific indices last year.

HSBC's research compared India's NSE – its largest market by volume – with the Shanghai Stock Exchange and the HKEX in Hong Kong.

China's beleaguered real estate sector is a source of concern for investors, which has also affected Hong Kong. Many Chinese real estate stocks including Evergrande Collection And Country Park Listed on the HKEX Stock Exchange.

China set its growth target at 5% for 2024, but analysts doubted the ability of the world's second-largest economy to achieve this goal. Standard & Poor's ratings agency said last week that it expects China's gross domestic product to grow by 4.6% in 2024, slower than the 5.2% rate of 2023.

“Factors in our outlook are continued real estate weakness and modest macro policy support,” Louis Kuijs, chief economist for Asia-Pacific at S&P Global Ratings, wrote in a client. “Deflation remains a risk if consumption remains weak and the government responds by further stimulating manufacturing investment.” “. NB.

Nicolas Aguzin, former CEO of the Hong Kong Stock Exchange, told CNBC in March that mistrust in China, rising interest rates and geopolitics are all impacting valuations and reducing the number of new listings on the exchange.

Indian stocks rose amid broader optimism about the country's growth. Country standard Nifty 50 index It has risen for eight straight years, recording a 20% gain in 2023.

Research conducted by HSBC also showed that the National Stock Exchange of India has overtaken the Shanghai Stock Exchange to become the second largest exchange globally in terms of monthly transaction volume. But it still lags behind the Shenzhen Stock Exchange, which ranked first.

Indian bourses also saw the most initial public offerings in 2023, according to research by EY India. This is despite the weak environment for IPOs, especially in Asia. India saw 220 IPOs last year, raising $6.9 billion in proceeds, according to EY. This represents a 48% jump in deal activity from 2022.

“While the Chinese market has slowed significantly, India has emerged as a standout performer,” George Chan, global IPO leader at EY, said in a separate research report.

Deals in India accounted for just 6% of global IPOs in 2019, but Chan said the country now accounts for 27% as of the first quarter, “pushing it to the position of the world's leading IPO market in terms of deal volume.”

In contrast, EY data showed that there were 30 IPOs on the Chinese A-share market in the first quarter, raising $3.4 billion. This is the lowest number of IPOs and smallest proceeds since 2020. Hong Kong had only 10 IPOs during the three-month period and only two had deal sizes exceeding $100 million, the lowest proceeds since 2010.