Hong Kong officials expressed cautious optimism about the city’s stock market performance this year as trading resumed after the Chinese New Year holiday on Monday.
They cited growing global investor interest and supportive policy measures as key factors to counteract rising geopolitical tensions.
“For the Year of the Snake, I am cautiously optimistic and hopeful for even better outcomes,” said Financial Secretary Paul Chan Mo-po during a ceremony marking the first trading day following the holiday.
Chan’s remarks come on the heels of a strong performance in the Year of the Dragon, during which the benchmark Hang Seng Index recorded a 28-percent gain, reversing the downward trend over the previous three consecutive years.
The rally, driven by hopes of policy support and the Chinese mainland’s economic recovery, saw technology stocks leading the charge. The Hang Seng Tech Index surged by 51 percent, with some individual tech stocks doubling in value over the period.
However, geopolitical tensions remain a significant concern. Over the weekend, US President Donald Trump announced an additional 10 percent tariff on Chinese goods, exacerbating trade frictions and creating fresh challenges for the market.
The Hang Seng Index on Monday reflected these uncertainties, plunging more than 2 percent during early trading before recovering to close nearly unchanged at 20,217.26 points.
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Acknowledging the risks posed by global trade frictions and slower-than-expected monetary easing, Chan underscored Hong Kong’s unique value proposition in the current geopolitical climate.
“Hong Kong is well-positioned to become the preferred hub for mainland enterprises expanding overseas, as well as the first choice for international businesses looking to enter Asia,” Chan said.
He added that Hong Kong’s appeal as a base for international or regional headquarters, treasury centers, and supply chain management hubs would continue to grow. “We aim to enhance our ability to attract cross-border capital, enterprises, projects, and talent, solidifying Hong Kong’s position as the region’s most convenient ‘one-stop’ resource integration center.”
At the same event, Hong Kong Exchanges and Clearing (HKEX) Chairman Carlson Tong Ka-shing expressed optimism about the renewed interest from Western investors in the Hong Kong market, pointing to the city’s recovering listing market.
In 2024, funds raised through initial public offerings surged to HK$87.5 billion ($11.22 billion), an increase of 89 percent from 2023, securing Hong Kong the fourth spot globally and second in Asia for fundraising, according to HKEX. Interest “remains robust”, with over 100 listing applications under review and around 30 new applications submitted in January alone.
HKEX CEO Bonnie Chan Yi-ting echoed this sentiment, citing positive feedback from international investors during the World Economic Forum in Davos, Switzerland, last month. “The response was overwhelmingly positive,” Chan noted. “Many investors were asking how much more allocation should be made to the Chinese mainland and Hong Kong markets this year.”
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To further bolster its global presence, HKEX plans to establish a new office in Riyadh, Saudi Arabia, later this year, said Chan Yiting, adding that the exchange operator will allocate more resources to attract issuers from Europe, the US, and Southeast Asia.
