Alibaba, HKEX Lure Investors as Record Inflows Surge to Hong Kong Stocks Ahead of Golden Week

Alibaba and HKEX are drawing in Chinese investors as the influx into Hong Kong shares escalates. The net inflows have surpassed last year's total due to an intense buying spree before the 'golden week' holiday.

Investors heading south purchased local stocks valued at HK$12.1 billion (US$1.6 billion) on Monday, marking the most substantial one-day sum in over half a year, as per the information from the stock exchange. This boosted the total trading volume in Hong Kong to an unprecedented HK$505.8 billion.

Thus far in the current year, investors from the mainland have purchased Hong Kong shares valued at $64 billion. This has exceeded the previous year's total of $42 billion and is on track to become the largest year since the $87 billion acquisition frenzy in 2020, as per the information provided by Goldman Sachs.

"Expectations of further gains are due to a decrease in interest rates, a weaker US dollar, stronger than predicted policy stimuli, and enhanced earnings revisions," explained Angus Chan, who leads the Hong Kong strategy at UBS Investment Bank.

The bank is now forecasting that the Hang Seng Index will close the year at 22,100 and the MSCI Hong Kong Index will reach 9,600. These targets are 7% and 1% higher than the bank's earlier predictions, as per a client report. Stocks that provide substantial yields and travel industry businesses that react to shifts in the Chinese economy are among their top choices, they further stated.