Mainland Chinese investors bought HK$23.42 billion (US$3 billion) worth of Hong Kong stocks via the Stock Connect on Tuesday, the second time in two weeks that daily southbound net buying exceeded HK$20 billion, as confidence builds in the city’s market rebound.
Advertisement
It marked the largest single-day inflow since April 9, when HK$35.6 billion of net buying was recorded, according to data compiled by Wind. On July 25, net purchases also topped HK$20 billion.
So far this year, net purchases through the southbound link have totalled more than HK$884.4 billion, according to exchange data, surpassing the full-year total for 2024 and reaching an all-time record.
“The southbound inflows actually serve as one of the most important drivers of the Hong Kong equity market,” said Kenny Tang, chairman of the Hong Kong Institute of Financial Analysts. “Supportive national policies are clearly aimed at revitalising the market and lifting valuations, which in turn help attract foreign capital.”
The surge in demand comes as global banks have become more optimistic about capital flows from the mainland. Last week, Goldman Sachs raised its forecast for full-year 2025 southbound inflows to US$160 billion from US$110 billion, citing a moderation in US-China tensions, strong buying momentum and supportive policies.
Advertisement
Investor sentiment has been buoyed by a series of positive signals in recent weeks, including a rebound in initial public offering (IPO) applications, rising turnover and expectations for better earnings from Hong Kong-listed firms. A total of 42 new listings raised a combined HK$107.1 billion in the first half, a sevenfold increase from a year earlier, putting Hong Kong at the top of the global league table, according to the city’s Securities and Futures Commission.
“With market capitalisation now exceeding HK$40 trillion, global and index funds are increasingly required to hold Hong Kong stocks,” Tang said. “This broader participation, along with a policy push to expand the market and facilitate more IPOs – especially for Chinese firms returning from the US – could further boost international interest.”