Mainland Chinese Investors Buy Record Amount of Hong Kong Stocks

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Summary:

Mainland Chinese investors bought a record HK$35.9B in Hong Kong stocks Friday, fueling a 2024 surge driven by cheap valuations and AI optimism, with flows nearing HK$1T and boosting key market indexes.

Mainland Chinese traders bought a record HK$35.9 billion ($4.6 billion) worth of Hong Kong-listed stocks on Friday, adding to their already hefty purchases so far this year.

The amount surpassed an earlier record of HK$35.6 billion set in April after Donald Trump announced sweeping global tariffs, according to Bloomberg-compiled data going back to late 2016. A gauge of Chinese stocks in Hong Kong pared a decline of 1.5% to finish the session 1% lower.

Mainland Chinese Investors Buy Record Amount of Hong Kong Stocks_1

Southbound Buying Hits Fresh Record of HK$35.9B

The latest buying spree takes the year-to-date Southbound flows to HK$940 billion, putting it on track for an annual record and inching closer to the HK$1 trillion estimated by some analysts. Mainland investors’ appetite for Hong Kong shares has expanded given cheaper valuations for dividend stocks and the appeal of Chinese tech firms following DeepSeek’s breakthroughs in artificial intelligence.

The inflows have helped push the Hang Seng China Enterprises Index up 24% so far this year, making it one of the world’s best performers. The funds also have squeezed Hang Seng Connect AH Premium Index to the lowest level since 2019, with onshore traded A shares tracked by the gauge now trading at a 22% premium over their Hong Kong counterparts.

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A/H Premium Slips to Lowest in Six Years

Meanwhile, animal spirits have seen a revival in the domestic market, where a liquidity-driven rally drove a popular stock gauge close to a decade high.

Source: Bloomberg

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