China investors are now eyeing Hong Kong stocks, after the Chinese stock market ended as one of the worst performing globally.
China investors are looking to re-allocate their investment portfolio after the Chinese stock market ended another year in the red. They consider Hong Kong as their top overseas investment destination, according to a survey released by the Hong Kong Investment Funds Association (HKIFA) on Sunday.
The HKIFA surveyed 1,026 residents online in the region covering the «Greater Bay Area» scheme, which included 411 from Hong Kong, 200 from Guangzhou, 207 from Shenzhen and 208 from Zhuhai.
Respondents were aged between 18 and 55, with either HK$300,000 or 300,000 renminbi or above in liquid assets. The Greater Bay Area scheme is designed to integrate Hong Kong with 10 other cities in the Pearl River Delta into an economic and business hub.
Hong Kong Stocks Preferred
Based on the survey respondents, their current investments excluding the property market on average allocated 33 per cent of their assets for offshore investment in the third quarter of 2018, of which 12 per cent went to the Hong Kong market. In contrast, Hong Kong respondents allocated only 19 per cent of their assets for offshore investment, of which 8 per cent went to mainland China markets.
In addition, 54 per cent of these respondents indicated their interest in using the stock connects in the coming 12 months. Southbound investment, or trading in Hong Kong shares by mainland China investors, through the stock connects fell from HK$583.7 billion in the third quarter of 2018 to HK$452.9 billion in the fourth quarter.
In comparison, a majority of Hong Kong investors have never invested via the stock connects, and their level of interest in doing so was low.
