Mainland Mania: Chinese Investors Surge into Hong Kong Stocks

Chinese investors are heavily investing in Hong Kong's stock market, motivated by AI opportunities and a desire for portfolio diversification. Inflows through the Stock Connect scheme reached a record HK$435 billion. Notably, tech firms like Alibaba and Tencent experienced substantial growth, indicating strong investor confidence in H-shares.

Mainland Chinese investors are flocking to Hong Kong's stock market, setting a record with their buying spree in the first quarter as they chase trends in artificial intelligence and seek to diversify their portfolios.

Using the Stock Connect scheme, net inflows from onshore funds into Hong Kong's equity market reached over HK$435 billion ($55.93 billion) this year, the highest quarterly purchases since the scheme's inception in 2014, surpassing the previous record of HK$373 billion in the first quarter of 2021. Tech giants such as Alibaba and Tencent were among the preferred choices for mainland investors, driven by AI breakthroughs and strategic meetings with Chinese President Xi Jinping.

The impressive surge of Alibaba, with a year-to-date increase over 60%, and Tencent's 22% rally have propelled the Hang Seng Tech Index into one of the top-performing global benchmarks this quarter. The surge in southbound investment has been further catalyzed by notable IPOs like Mixue, drawing significant interest amidst a slowdown in mainland-listed A-share offerings.

(With inputs from agencies.)