Affluent investors are bullish on Hong Kong equities in 2025 as artificial intelligence (AI) drives lucrative investment opportunities, HSBC’s latest survey on the private wealth market has revealed.
About 55 percent of the surveyed investors expected at least a 5-10 percent increase in the Hong Kong stock market benchmark, the Hang Seng Index, US’ S&P 500 and Singapore’s Straits Times Index by the end of this year, according to the survey.
The survey polled 200 high-net-worth individuals, each with at least $1 million in investable assets, across Hong Kong and Singapore, gauging how megatrends impact sentiment in these financial hubs.
READ MORE: Hong Kong stocks surge on AI optimism despite US-China trade tensions
Maggie Ng, head of wealth and personal banking in Hong Kong at HSBC said, “AI is a game-changer for businesses, enhancing efficiency, productivity, and decision-making while reducing human error.
“However, AI adoption needs to address challenges, such as trust issues, talent shortages, and corporate culture pushback.”
About 44 percent of high-net-worth individuals expect AI and other technologies’ advancements to bring “significant investment opportunities this year”, while 47 percent identify technological disruptions as “the leading investment risk”.
The market’s renewed confidence coincides with the success of the Hangzhou-based startup DeepSeek’s cost-effective first-generation reasoning models despite US chip restrictions. The HSI surged 15 percent in the past six months.
In an upbeat move, Morgan Stanley has revised its year-end targets upward for major Chinese stock indices, including the HSI and the Hang Seng China Enterprises Index, marking its second upgrade in just over a month.
In a note, Laura Wang, a strategist at Morgan Stanley in Hong Kong, said that “China’s advancements in AI and other cutting-edge technologies have become a pivotal factor in market sentiment. DeepSeek’s breakthrough has reinforced investor confidence in the country’s ability to cultivate new growth drivers, marking a significant turning point.”
MSCI Emerging Markets Index trades at about an 8 percent premium to MSCI China Index, while the HSI shows an even wider 11 percent discount. The data suggested “substantial room for incremental inflows to Chinese equities,” Wang noted.
The HSI rose 1 percent to 23,729.33 at 12:09 pm on Thursday.
The HSBC survey also found that 40 percent of respondents see AI as an overhyped profit driver, 31 percent believe it will boost efficiency despite higher costs, and 24 percent view it as a key earnings growth catalyst.
READ MORE: AI hype supercharges mainland stocks to three-year high in Hong Kong
Geopolitical tensions are seen as the second major trend splitting investor sentiment, per the survey. Nearly 22 percent see them as opportunities versus 27 percent who perceive risks, yet 92 percent retain a neutral-to-positive 2025 outlook for Asia’s economy.
North America remains the top investment destination for 43 percent of respondents over the next decade, with Asia ranking second at 28 percent.
“This survey shows that high-net-worth investors are experienced in adopting a multi-asset investment strategy to capture the diversification benefits from multiple markets and asset classes,” said Lok Yim, regional head of global private banking in Asia Pacific of HSBC.
Contact the writer at tianyuanzhang@chinadailyhk.com
