The Hang Seng Index ended the week of Dec 13-17 at 23,192, the year’s low, and a one year low. In a strategy report, OCBC Investment Research pointed out that the MSCI World Index gained 18.5% this year, after a 14.1% gain in 2020. However, China and Hong Kong stocks were badly hurt by domestic factors including heightened regulatory policies, concerns of more measures ahead, and the troubled Chinese developers. Year-to-date, the MSCI China Index shed 19.5% after a 26.7% gain in 2020. The Hang Seng Index fell about 11.9%.
To boost activity, the Hong Kong Exchange announced on Dec 17, that it has a ready regulatory framework for blank cheque companies, or Special Purpose Acquisition Companies (SPAC). Bloomberg reports that Hong Kong has taken a careful approach to allowing SPAC listings after being hit by scandals surrounding shell companies in the past. SPACs were very popular in the US earlier this year. Hong Kong family offices have played a “major role” in US SPACs, the Family Office Association Hong Kong said in November, according to Bloomberg. Listing via a SPAC could boost listings in Hong Kong which has experienced a slowdown this year because of market turmoil in China.
