Portfolio | HK healthcare stocks tipped for more gains on mainland China fund inflows
More gains are likely in store for Hong Kong healthcare shares that have been flying high since a move to allow mainland mutual funds to buy in the city’s stocks under the through train scheme ignited a market boom.
That’s the view of Macquarie Research, which expects to mainland institutions to boost their participation in the Hong Kong market under the tie-up with the Shanghai bourse.
“Chinese mutual fund buying through the Shanghai-Hong Kong Stock Connect will focus on undervalued (compared to A shares) quality stocks that are not available in the A-share market and buy deeply discounted dual-listed H-shares with well-understood stories, Macquarie says in a report.
“Healthcare stocks listed in Hong Kong are trading significantly lower than their A-share counterparts.”
Shares of Hong Kong pharmaceutical and traditional Chinese medicine firms are trading at discounts of 30 to 35 per cent to their A-share counterparts, says Macquarie, noting that such stocks have been among the beneficiaries of the bull run since April.