Global Investors Rush into HK Stocks, Favoring Tech and Green Energy Assets

Hong Kong stocks have shown strong appeal this year. Wind data shows the Hang Seng Index surged over 27% year-to-date as of July 29.

Foreign institutions are actively accumulating quality HK assets. HKEX’s CCASS data reveals stable and flexible foreign holdings reached 60.4% by Q2 2025.

Wu Xinkun, Cathay Haitong Securities’ chief overseas strategist, noted foreign capital dominates most HK sectors.

Valuations Remain Attractive

Why is HK a "must-have" for global investors? Key drivers include:

1. Global Rebalancing: Capital flowing back to emerging markets;

2. Undervaluation: HK stocks trade at compelling valuations;

3. Tech Sector Rise: Especially in AI and innovation.

UBS Securities’ Meng Lei stated weaker USD and loose liquidity will fuel EM inflows, benefiting H-shares. AllianceBernstein’s Zhu Liang added HK’s IPO expansion will attract more capital.

HK valuations outperform peers. Wang Zonghao, UBS Investment Bank, highlighted capital flows and innovation as near-term catalysts.

Many quality HK assets (tech, consumer, healthcare) trade below A-share peers. UBS’s Li Meng emphasized:

• Tech/AI: A global focus with stellar YTD performance;

• New Energy: Sustained inflows due to long-term growth;

• High-Dividend Banks: Institutional favorites for stable returns.