Hong Kong stock market increasingly driven by mainland China investors: Hang Seng Indexes
- Hong Kong stocks supported by southbound flows, as index tracking inbound funds easily outperforms the benchmark Hang Seng Index, according to index compiler
Hong Kong stock market’s gains this year have been supported by inflows from mainland Chinese investors, who are driving turnover higher, according to a study by index compiler Hang Seng Indexes (HSI) on Wednesday.
Southbound inflows under the Stock Connect scheme, which allows qualified mainland Chinese investors to trade eligible shares listed in the city, have doubled year to date to HK$321 billion (US$41 billion) compared with the whole of 2023, it said.
This has helped the Hang Seng Composite Index, a gauge which covers 95 per cent of the city’s market capitalisation, rise 6 per cent so far this year. The index is poised to extend its gains for a fifth consecutive month in June.
Reflecting the shift in investor dynamics, the Hang Seng Stock Connect Hong Kong Top Shareholding 50 Index (HSHKS50) has surged by 15.9 per cent this year, outperforming the benchmark Hang Seng Index by about 10 percentage points, HSI said.
“The strong rally, which began in late January, came amid strong inflows from southbound investors,” HSI said. “Notably, if the monthly net inflows remained positive by the end of June, it would mark the 12th consecutive month of positive net inflows for southbound investment.”