Hong Kong Equity Strategy

Hong Kong's equity market is presenting an attractive accumulation opportunity following a regulatory-led sentiment shock that is largely priced in. Fundamentals remain constructive with strong support for the Financials and Real Estate sectors.

Key Takeaways

• 1.The recent sentiment-led correction in Hong Kong equities is largely priced in, and the index is currently at an attractive accumulation point.
• 2.Cross-border capital control regulations have manageable industry-level impact, with Mainland investor exposure contained in the asset management sector.
• 3.Financials remain a top sector recommendation, expected to benefit from capital markets leverage and high yield, while Real Estate is supported by the property upcycle.

Table of Contents

• Key charts
• MXHK constituents' earnings track records: Financials may deliver upside surprise
• HK SFC’s 2025 Asset and Wealth Management Survey: limited direct impact from cross-border capital tightening
• Flows and positioning: strong capital market activities
• Macro snapshot: upcycle intact, but at a slower pace
• Attractive valuation plus robust earnings
• Peak hawkishness and dollar’s modest bullish tilt
• Appendix

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