Hong Kong’s stock exchange reported its highest quarterly profit almost four years later, after China’s stimulus package increased the volume of trading and listings.
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BEIJING – Mainland China investors are piling up in Hong Kong’s stock market in record quantities as the tech-heavy Hangsen index trades at a three-year high.
Mainland China purchases of Hong Kong stocks were recorded at $29.62 billion ($3.81 billion) on Monday, according to Wind Information Database.
It has been most important since Hong Kong’s stock market launched its “Connect” program with the mainland. Shanghai Connection was released in November 2014, and Shenzhen Connect opened in December 2016.
The Hang Seng Index traded about 0.7% lower on Tuesday morning. The sudden sale of US stocks then sold out overnight on concerns about the impact of tariffs on global growth.
Online purchases via Shanghai connections reached around HKD 18 billion on Monday, while deep Shenzhen Connect’s reached HKD 11.63 billion, data shows.
According to Wind Data, neither of the Hong Kong trade stocks of Alibaba and Tencent, which are traded in mainland China, were not traded in mainland China.
Last week, China highlighted its plans to support private sector innovation, confirming its growth plan by increasing the fiscal deficit to a rare 4% of gross domestic product, including a consumer subsidy program that expanded its fiscal deficit.
City’s global macro strategy team upgraded its view on China’s stocks, the Hungsen Chinese Enterprise Index – to overweight and downgraded the US to neutral on Monday.
“One of the key reasons why we are not focusing on Chinese equities is tariff risk,” the analyst said.
“I think that abstracting from this issue, the case of Chinese technology was clear: a) Deepseek has proven that Chinese technology is on the frontier (or more) of Western technology despite export controls.
“cheap and owner-like” stock
Chinese and foreign institutional investors have returned to Chinese stocks after Beijing began to announce stronger stimulus plans in late September. Chinese stocks were further boosted after Deepseek’s latest model emerged in late January. More major high-tech companies trade in Hong Kong than in mainland China.
Manishi Raychaudhuri, CEO of Emmer Capital Partners, said once investors come out of the smallest shares of the present, they can quickly put their money into emerging markets, particularly in Asia.
“I would say it’s still a bigger China. I mean most of the Chinese Hong Kong. The stock is cheap and owned,” Raychaudhuri told CNBC’s Street Signs Asia on Tuesday.
“We’ve seen some consumption increase in some way in the form of what policymakers have been doing since January. That’s not what the market wants, but at least it’s a departure from the trends that have been around for years,” he continued.
“So, at the top of my list, there are Hong Kong, China, internet stocks, large internet platforms, and mostly athletes, restaurant stocks, and other travel and tourism-related names, some of the consumption-related names,” Raychaudhuri said.
– CNBC’s Sam Meredith and Anniek Bao contributed to this report.
