Tencent Holdings was the buyers' top pick, accounting for about a quarter of the inflows during the period via trading links with Hong Kong. – AP
HONG KONG: Chinese investors are scooping up Hong Kong tech stocks, lured by the market’s cheap valuation after shares saw some of the biggest plunges worldwide.
Onshore investors have been net buyers of Hong Kong-listed stocks for 24 straight sessions through Nov 8, adding HK$118bil (US$15bil or RM71.2bil) in the longest run of gains since early 2021, according to data compiled by Bloomberg.
Tencent Holdings was their top pick, accounting for about a quarter of the inflows during the period via trading links with Hong Kong.
“We’ve positioned Hong Kong shares to the maximum, especially for companies like Tencent,” said Jiang Liangqing, managing director at Zhuhai Greenbamboo Private Fund Management.
“They are so cheap and attractive and set to be the biggest beneficiaries once expectations about China’s future return to normal.”
The inflow from mainland China likely offered some support to the Hong Kong market, which has seen key gauges slump this year as investors worried over China’s growth-crippling zero-Covid restrictions.
The Hang Seng Tech Index had dived about 50% this year through its October low before rebounding as traders started to position for an eventual unwinding of pandemic curbs.
Unlike in early 2021, when an overall stock market frenzy drove 38 straight days of inflows, the current run of gains is mostly due to dip-buying as valuations have reached historic lows.
Despite the recent rebound, Tencent remains nearly 70% off last year’s record.
Following Tencent, Meituan and Wuxi Biologics Cayman Inc were the next most-bought stocks by mainland investors.
The CSOP Hang Seng Tech Index, an exchange-traded fund (ETF) that has Xiaomi Corp as its top holding, also saw significant inflows of more than HK$3bil (RM1.8bil).
“Hong Kong ETFs are also a good way to diversify investment or get some exposure to firms like Alibaba that are not yet eligible through the Connect,” Jiang said. — Bloomberg
