The Hong Kong tech sector has recently faced downward pressure, with the Hang Seng Tech Index—a key benchmark—falling close to its annual support level as of yesterday's close. This has attracted inflows into related assets. Wind data shows that the popular Hang Seng Tech ETF (513130) recorded net inflows of 990 million units in a single day.
With fresh capital inflows, the ETF's total units outstanding rose to 59.663 billion, with assets under management reaching 42.337 billion yuan. In terms of trading activity, the ETF has averaged a daily turnover of 5.468 billion yuan since Q4 2025, demonstrating strong liquidity. (Data source: Exchange, as of 2025/12/16; other data from Wind.)
As an offshore market, Hong Kong equities are highly sensitive to liquidity conditions. Recent pressures—including expectations of lock-up share expiries in December, slowing southbound inflows, and rising speculation about a Bank of Japan rate hike—have weighed on the market. However, Huafu Securities notes that expectations for a BoJ hike have already been priced in, and the USD/HKD exchange rate remains stable, suggesting the Hong Kong Monetary Authority may not need to aggressively tighten liquidity.
Additionally, the Securities and Futures Commission and HKEX plan to strengthen IPO oversight, which could improve listing quality and capital allocation efficiency, ultimately reducing inefficient liquidity drain from low-quality financing. This may gradually ease core pressures on Hong Kong stocks.
On the macroeconomic front, U.S. non-farm payrolls rose by 64,000 in December, beating expectations of 50,000, but the unemployment rate climbed to 4.6%—the highest since September 2021. This volatility reinforces market expectations of continued Fed rate cuts, potentially benefiting liquidity for Hong Kong tech stocks.
The Hang Seng Tech ETF (513130) closely tracks the Hang Seng Tech Index, which includes leading tech firms such as Meituan-W, Xiaomi Group-W, Tencent Holdings, Alibaba-W, and SMIC. These companies dominate sectors like internet services, mobile payments, cloud computing, and AI. Compared to A-share hard-tech firms, Hong Kong-listed tech assets focus more on applications and internet platforms, offering unique exposure.
The recent correction may have mitigated near-term risks, creating opportunities for capital deployment. The Hang Seng Tech Index’s P/E ratio has dropped to 22.74x, near a five-year low of 31.42%. It also appears undervalued relative to major U.S. and A-share tech indices, such as the Nasdaq (41.09x) and STAR 50 (156.57x).
As liquidity concerns ease and with support from strong Q3 earnings and AI developments, the Hong Kong tech sector remains a key market theme. The Hang Seng Tech ETF (513130), holding over 220,000 investor accounts as of mid-2025, offers advantages like scale, liquidity, and intraday T+0 trading, with a low annual management fee of 0.2%.
Risk Disclosure: Investing involves risks. Past performance does not indicate future results. Investors should assess their risk tolerance and review fund documents carefully. The Hang Seng Tech Index is compiled by Hang Seng Indexes Company, which disclaims liability for any errors.
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