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From Komfie Manalo, Opalesque Asia:

The Hong Kong Securities and Futures Commissioner has just released its latest research paper entitled: “Half Yearly review of the Hong Kong Securities Market” which shows that despite the recent strong rebound of the global stock markets, fundamental support to the surge in the stock markets has not been broad-based. Signs of economic recovery are emerging at best. The recent rally in the stock market seems to be underpinned by a strong capital inflow, but it should be noted that capital movements are known to be volatile and subject to sudden reversals.

According to the paper, since the trough in early March this year, major stock markets have rebounded some 30% – 60% until the end of June. However, it is worth noting that such strong rebound might not be uncommon following a crisis.

The report says that Hong Kong stocks fell at the start of the year on uncertainties over the global economic performance and concerns about financial institutions in the U.S. The Hang Seng Index (HSI) and Hang Seng China Enterprise Index (HSCEI) dropped to this year’s trough in early March. Later, markets rebounded strongly on optimism over global economic recovery amid signs of stabilization in economies. In addition, strong capital inflow to the Hong Kong banking system and stock market also lifted the markets. During the first half of 2009, the HSI and the HSCEI rose 27.7% and 38.9% respectively from t......................

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