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China Traders Are Still Pouring Money Into Hong Kong Stocks

Chinese investors aren’t giving up on Hong Kong stocks, even as protests extend into a another week.

China Traders Are Still Pouring Money Into Hong Kong Stocks
A fountain stands in front of an electronic ticker board and a screen displaying stock figures outside the Exchange Square complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China. (Photographer: Justin Chin/Bloomberg)

(Bloomberg) -- Chinese investors aren’t giving up on Hong Kong stocks, even as protests extend into a another week.

Investors on the mainland bought shares in the city for a 32nd session Monday. They’ve poured a net HK$72 billion ($9.2 billion) across the border in that period through exchange links with Shanghai and Shenzhen, data compiled by Bloomberg show. That’s the longest buying streak since December 2017, when mainland investors purchased Hong Kong stocks over 50 consecutive sessions.

Chinese traders have been lured by cheap valuations and ignored the worst deterioration in corporate net income in three years. The Hang Seng Index is trading near the lowest price to book multiple since late 2016, while A shares still command nearly 29% premium over their peers listed in Hong Kong.

The Hang Seng Index slipped 0.4% Monday, taking its drop from an April high to 15%. The gauge has given up all its gains for the year and is the worst-performing major index globally in the past month.

--With assistance from Jeanny Yu.

To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Will Davies, Philip Glamann

©2019 Bloomberg L.P.

With assistance from Bloomberg