Mainland China’s funds flood Hong Kong as ‘Southbound’ capital doubles to US$110.4 billion
Sharp increase in mainland buying comes as trading and fundraising activity in the city rebounds after a multi-year slump
Mainland Chinese investors snapped up more Hong Kong equities so far this year than in all of 2024, as southbound flows hit HK$866.8 billion (US$110.4 billion) up to July, according to data compiled by Wind. That was already 107 per cent of last year’s total.
“There’s a clear and sustained trend of mainland money flowing into Hong Kong stocks,” said Kenny Ng, a strategist at Everbright Securities International. “With bond yields on the mainland falling to unattractive levels and A shares proving too volatile for income-focused investors, many are turning to Hong Kong’s market, which offers high-dividend quality names – especially among Chinese enterprises.”
He added that the total value of Hong Kong stocks held by mainland investors had reached record highs and southbound trades accounted for 20 to 30 per cent of Hong Kong’s daily turnover – a level he described as “healthy”.
Net purchases via the southbound channel during the first half of the year reached HK$731.2 billion – equivalent to 91 per cent of the total for all of 2024, the report showed. All told, the southbound scheme brought in HK$4.42 trillion as of the end of June 30 since its inception, according to the report.