Signs are omnipresent that mainland Chinese investors are rotating out of Hong Kong stocks and back to the onshore yuan-denominated market, as they recalibrate to add domestic exposure to the fervour surrounding the artificial intelligence buildout.<\/p>\n
Onshore investors sold a combined HK$3.6 billion (US$459.5 million) of Hong Kong stocks through the cross-border exchange link programme in May, marking the first monthly outflow in three years, according to data from the city\u2019s exchange.<\/p>\n
Mainland-listed exchange-traded funds (ETFs) tracking the Hang Seng Tech Index logged an outflow of 6 billion yuan (US$886.7 million) last week, according to China Galaxy Securities. Meanwhile, the premium that mainland stocks \u2013 also known as A shares \u2013 command over Hong Kong peers has rebounded from a multi-year low, indicating that yuan-denominated stocks are regaining favour.<\/p>\n
The current trend could overturn the long-standing perception that Hong Kong\u2019s stock market is a focal point for the Chinese companies that are the most representative of the fast-growing sector. The appeal of Hong Kong stocks is receding amid global AI mania, where big tech firms such as food delivery giant Meituan<\/a> have seen their profits decline amid a price war. On the other hand, mainland markets have been galvanised by the listings of AI chipmakers such as Moore Threads Technology<\/a> and MetaX Integrated Circuits.<\/p>\n Mainland-traded shares had a larger weighting of \u201cpure technology companies, so we are relatively confident that technology will outperform the broader market,\u201d said Pierre Lau, China equity strategist at Citigroup. \u201cGiven China\u2019s capacity to implement more accommodative policies, we believe A shares will perform better.\u201d<\/p>\n The US bank is not alone in making such a call. Goldman Sachs on Wednesday lowered its rating on Hong Kong stocks to market-weight, citing a delayed earnings recovery. But it remained overweight on mainland shares, which it said would receive a tailwind from improved earnings momentum, favourable liquidity conditions and more proxies to AI hardware.<\/p>\n Morgan Stanley shared a similar view, arguing in a report last week that the higher concentration of high-end manufacturing and hard-core tech names, alongside more AI-linked initial public offerings and potential state buying, would make mainland stocks a better bet.<\/p>\n","protected":false},"excerpt":{"rendered":"Signs are omnipresent that mainland Chinese investors are rotating out of Hong Kong stocks and back to the…\n","protected":false},"author":2,"featured_media":62844,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[35847,24,25,387,35842,2701,1296,18997,2700,35841,35844,35845,304,588,35843,35846,698,390],"class_list":["post-62843","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-a-share-market","tag-ai","tag-artificial-intelligence","tag-china","tag-china-stocks","tag-citigroup","tag-goldman-sachs","tag-hang-seng-tech-index","tag-hong-kong","tag-hong-kong-stocks","tag-julius-baer","tag-mainland-stocks","tag-morgan-stanley","tag-nasdaq","tag-outflows","tag-shanghai-exchange","tag-south-korea","tag-taiwan"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/62843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=62843"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/62843\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/62844"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=62843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=62843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=62843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}