“The Big Short” investor Michael Burry has made a cryptic tweet about Hong Kong, possibly indicating his stance about stocks listed in the region.
“As for me, I like Hong Kong,” he tweeted. Interestingly, Burry’s tweet coincides with a stellar opening by the Hang Seng index on Monday, rising over 3% as China eased some of its COVID restrictions, easing testing rules in some cities.
Screenshot of Burry’s tweet
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Stocks of Alibaba Group Holding Ltd BABA rose over 4%, while Nio Inc NIO jumped over 11%. Xpeng Inc XPEV shares rose over 20% in morning trade while Li Auto LI shares rose over 9%.
In late October, Hong Kong’s benchmark index Hang Seng fell below the 15,000 mark for the first time since April 2009 as investors continued to flee mainland Chinese stocks following President Xi Jinping’s historic consolidation of power.
Valuations: Burry had then tweeted his take on the index, explaining how Hang Seng valuations have dropped significantly compared with figures in 1997. He observed the Hang Seng index recently hit levels similar to where it was 25 years ago; however, valuations have declined considerably with earnings falling seven times, compared with 25 times back then, despite GDP ballooning by 18 times.
“Meet the new boss, same as the old boss. The Hang Seng recently hit 1997 levels. 25 years. Yet GDP multiplied 18 times during that time. 1997 valuations were 20x Earnings, 10x EV/Sales, 3x Tangible book. Now 7/1/1. Note, 3 of last 4 Premiers served 3 terms,” Burry had tweeted.
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