Latest news with #Southbound
Reuters
6 days ago
- Business
- Reuters
Mainland China capital surge fuelling Hong Kong investment boom
HONG KONG, July 24 (Reuters) - Surging investment into Hong Kong by mainland Chinese investors is increasing market liquidity and depth while strengthening the island's position as a gateway to China. Short-term headwinds could slow this capital flood, but market innovation and the push for diversification are likely to propel this trend over time. The Stock Connect programme, launched by the Hong Kong, Shanghai and Shenzhen exchanges in November 2014, enabled mainland Chinese investors to trade selected stocks listed in Hong Kong – the so-called "Southbound Stock Connect" – while also facilitating flows in the opposite direction. The Connect programme was expanded between 2017 and 2023 to include bonds, ETFs and interest rate swaps. Since 2015, the first full year of the programme's operation, onshore trades through the Southbound route have grown at an impressive 32% compound annual growth rate. In fact, Southbound's share of average daily turnover grew from 1.6% in 2015 to 18% in 2024, according to data from the Hong Kong Exchange (HKE). Onshore investors have consistently bought more through Southbound than they have sold, resulting in net inflows every year since the programme began. The flows were healthy but somewhat volatile until 2023, after which they skyrocketed. Net inflows more than doubled in 2024, and that figure has been nearly matched in just the first six months of 2025. What explains this appetite for Hong Kong-listed stocks? Geographic diversification is clearly a strong motive, as mainland Chinese investors have limited avenues for owning overseas assets. Investors may also seek to gain exposure to companies in key sectors that are under-represented in domestic markets, such as technology or insurance. For example, leading Chinese internet platforms Tencent and Alibaba, insurance market leader AIA and global bank HSBC are not listed on onshore indices. However, many of stocks popular among mainland investors are listed both onshore and in Hong Kong, again raising the question of why capital is increasingly flooding into the latter. The answer may simply be price. Many of these dual-listed stocks trade at far cheaper valuations in Hong Kong than in Shanghai or Shenzhen. The average premium of onshore "A-shares", tracked by the Hang Seng AH Premium Index, was only 3.2% prior to the commencement of the Stock Connect programme. This figure jumped to 34.1% soon after, as international money flowed into mainland Chinese equities through Northbound Connect, inflating valuations. The premium remains elevated, though it has declined recently. The influx of capital has increased the Hong Kong equity market's liquidity and depth, making it increasingly attractive for local companies seeking new listings and for onshore Chinese companies seeking additional listings. Indeed, in the first half of 2025, Hong Kong has been the world's largest IPO market, with $14 billion of issuance, easily outstripping Nasdaq, which was in second place with just over $9 billion. At the same time, the Stock Connect programme has also strengthened Hong Kong's position as an offshore renminbi hub, as the HKE has argued, opens new tab, and driven robust cross-border regulatory cooperation, involving regular meetings and exchange of ideas. The flip side of the onshore money avalanche could be increased volatility in Hong Kong markets, especially given that the trading style of mainland Chinese investors has historically been characterised by rapid transition from one sector or theme, to another. For example, onshore investors flocked to the internet platforms Alibaba and Tencent, and technology giant Xiaomi, throughout 2024 and early 2025, only to sell significant volumes this past May and June. It is also possible that some common preferences among onshore Chinese investors, such as the attraction to high dividend yields, could begin to affect the relative performance of stocks in Hong Kong. CNOOC, China Construction Bank and China Mobile – all characterised by low growth but high dividends – have remained Southbound favourites this year, based on monthly "Top 10" lists. What could derail this exuberance? The potential weakening of the renminbi could be one headwind, as it would make HKD-denominated stocks more expensive for mainlanders. Additionally, improved performance among mainland markets could also discourage Chinese investors from overseas diversification. In 2025 so far, Hong Kong's Hang Seng index is up 23.8%, dwarfing the Shanghai Composite's 5.5% gain. A reversal of return prospects could obviously reverse the direction of flows. Finally, U.S.-China geopolitical tensions are a perennial bugbear. Hong Kong permits money to be moved in and out of the city without many restrictions, which exposes it to risks from such political conflicts. Any adverse political outcome could make Chinese investors more inclined to keep their capital onshore. However, most of these potential headwinds are likely short-term phenomena, and ultimately, the long-term direction of travel is clear. Mainland Chinese savings represent a gigantic pool of still mostly untapped capital. Total deposits at the end of June 2025 were RMB 320 trillion ($44 trillion), according to PBOC reports, opens new tab. And total overseas portfolio investments in March 2025 were only $1.58 t, opens new tabrillion, less than 4% of households' domestic deposits. The need for greater diversification among mainland Chinese investors thus remains significant, meaning the surge of capital into Hong Kong markets may just be getting started. (The views expressed here are those of Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd. and the former head of Asia-Pacific Equity Research at BNP Paribas Securities.) Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI,, opens new tab can help you keep up. Follow ROI on LinkedIn,, opens new tab and X., opens new tab
Bloomberg
22-07-2025
- Business
- Bloomberg
Chinese Investors Snap Up Hong Kong Stocks as Flows Near Record
Mainland Chinese investors' purchase of Hong Kong-listed stocks is approaching an annual record, driving a rally that has made a key benchmark in the city one of the world's best performers. Southbound net inflows expanded by another HK$2.7 billion ($344 million) Tuesday, taking this year's total to HK$800 billion, a whisker away from 2024's previous record of HK$808 billion.
Malay Mail
13-06-2025
- Malay Mail
Fatal chain collision on NSE southbound: Lorry duo killed after rear-ending timber trailer in Johor
BATU PAHAT, June 13 — A lorry driver and his assistant died after being involved in an accident at Kilometre (KM) 81.9, North-South Expressway (PLUS), Southbound, yesterday morning. Batu Pahat district police chief, ACP Shahrulanuar Mushaddat Abdullah Sani said those who died in the accident at 8.30am were driver R Pubalan, 45, and his assistant, R Sivasanthiran, 35. According to him, initial investigations found that the incident occurred when the lorry carrying electronic goods, crashed into the back of a timber trailer. 'As a result of the collision, the timber lorry went on to crash into an oil tanker. 'The two victims, who suffered serious head, chest and leg injuries, were confirmed dead at the scene while the driver of the timber lorry who sustained minor leg and chest injuries was taken to the Sultanah Nora Ismail Hospital (HSNI), Batu Pahat. However, the driver of the oil tanker was not injured,' he said in a statement. Shahrulanuar said the case was being investigated under Section 41 (1) of the Road Transport Act 1987 and members of the public who witnessed the incident could come forward to any nearby police station. — Bernama
BBC News
27-05-2025
- Automotive
- BBC News
Long delays on A12 after gas works close lane at Marks Tey
There are heavy delays on the southbound A12 in Essex due to gas works. National Highways said there had been one emergency lane closure at junction 25 for Marks Tey "for gas utility works". It reported about 50 minutes of hold-ups between junction 28, for Colchester, and junction 25. Drivers are being warned to allow extra time for their journey. Follow Essex news on BBC Sounds, Facebook, Instagram and X.
South China Morning Post
10-04-2025
- Business
- South China Morning Post
Hong Kong dollar strengthens as mainland stock buyers drive demand amid volatile markets
Hong Kong's currency has strengthened to its strongest level in four years against the US dollar, driven by the demand from mainland China's stock buyers who are dipping into one of the world's cheapest major capital markets through the Stock Connect scheme. Advertisement The local dollar changed hands at 7.7595 for every US$1 on Thursday morning, retracing from a high of 7.7560 per US dollar on Wednesday. This was close to the top end of the local dollar's trading range against the US currency that has been in place since 2005 to augment the 1983 currency peg, which requires intervention by the Hong Kong Monetary Authority (HKMA) to bring the exchange rate back to within the band of 7.7500 to 7.8500 per US dollar. The jump in the local currency, in spite of Hong Kong being hit with US tariffs along with mainland China, was due to the inflow of overseas capital in search of bargains in the city's stock market, which is trading at an average of 10 times earnings , bankers said. That included the so-called Southbound capital from the mainland, where investors would exchange the yuan for the Hong Kong dollar to buy Hong Kong-listed Chinese companies like Alibaba Group Holding and Tencent Holdings , they said. Hong Kong's Hang Seng Index rose 1.5 per cent on April 8, 2025. Photo: Agence-France Presse. 'Continuous Southbound inflow from mainlanders in Hong Kong is a major contributor to the local dollar's strength,' said Tommy Ong, the managing director of T.O. & Associates Consultancy, who expects the currency to hover between 7.7570 to 7.7800 per US dollar before June. 'The repatriation of Hong Kong dollars after selling US stocks from Hong Kong and Chinese overseas accounts may also add to the Hong Kong dollar's strength,' he said. Advertisement
