Goldman Sachs raised its forecast for investment by mainland Chinese in Hong Kong-listed stocks by almost 50 per cent, following the strongest start to the year on record in terms of Stock Connect fund inflows.
Net southbound inflows could reach US$110 billion this year, versus a previous forecast of US$75 billion, the Wall Street investment bank said in a report on Sunday, citing expectations of increased capital moving into Hong Kong amid concerns about US-China financial decoupling.
These inflows reached US$78 billion so far this year through April, Goldman estimated, including record one-day net purchases of HK$35.6 billion (US$4.6 billion) on April 9. Total inflows this year have surpassed full-year volume in most years, apart from 2020 and 2024, it added.
“[The] buying of domestic institutional investors could be the major contributor to the year-to-date southbound inflows,” Goldman said.
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Stock markets in Asia resume slump as hefty US tariffs on China take effect
Stock markets in Asia resume slump as hefty US tariffs on China take effect
As foreign capital leaves China to avoid regulatory and geopolitical risks stemming from a tariff war, mainland Chinese investors have continued to expand their cross-border asset allocations for higher returns in Hong Kong, and to protect their investments from yuan depreciation, it added.
