Investors rush to rebalance Chinese stock holdings

Many foreign investors regretted underweighting Chinese stocks in recent years and are now rushing to rebalance their portfolios, according to Financial Secretary Paul Chan Mo-po. 

This trend stemmed from geopolitical uncertainties that previously led fund managers to allocate less capital to Chinese equities, Chan said. 

However, with the launch of DeepSeek – which unveiled China’s advancements in technology – along with the stabilization of the real estate sector and local government debts, investor confidence in Chinese assets has been reinvigorated, Chan said, adding that steady economic growth in the country last year and government-led measures to stimulate consumption also help drive this change.

He highlighted the ongoing expansion of prominent US and European financial institutions in Hong Kong as clear evidence of international confidence in the city’s financial ecosystem. 

To maintain the financial hub’s edge, Chan emphasized the importance of bolstering financial security while promoting growth. Specific strategies include reforming the initial public offering market, optimizing the listing process, and reducing transaction costs.

Chan reiterated the SAR’s commitment to strengthening both internal and external connections, targeting the Middle East, Southeast Asia and Europe as priority markets for investment promotion efforts. 

Regarding the local property sector, the secretary said the market is stabilizing and stressed that future land supply would be managed prudently to avoid disruptions, with land sale plans aligned to market absorption capacity. 

Chan also expressed optimism that, as interest rates begin to decline, public interest in homeownership would likely rebound, supporting a steady recovery in the sector.

STAFF REPORTER