Looking ahead to 2025, Chan stated that in the financial sector, there will be a continued push for the all-around development of financial markets, from the stock market, bond market, insurance, private equity funds, venture capital, to asset and wealth management, offshore renminbi business, green finance, digital finance, and commodity trading, allowing the Hong Kong market to play a full chain financing role, better serving the development of the real economy.

Regarding investment opportunities in the Hong Kong stock market in 2025, Galaxy Securities pointed out that Hong Kong stocks are relatively undervalued among global equity indices, making them quite attractive. In 2025, Hong Kong stocks are expected to rise amid wide fluctuations. In terms of allocation, three major directions are favored: 1. Hong Kong stocks in the consumer sector with relatively low valuation levels; 2. Technology sector, especially in AI, Consumer Electronics, and Semiconductors; 3. The high dividend strategy of Hong Kong stocks remains attractive.

Latest statement from Paul Chan Mo-po.

On December 29, Paul Chan Mo-po, Financial Secretary of the Hong Kong Special Administrative Region Government, expressed in a blog that in retrospect of 2024, Hong Kong's economy has steadily progressed amid continuous transformation and uncertain external environments, with improved asset market atmosphere, continued thriving financial industry, and a gradually stabilizing housing market. He mentioned that the overall economic growth in Hong Kong is projected to be 2.5% for 2024, the unemployment rate remains low, inflation is mild, and residents’ income has recorded substantial increases.

Chan introduced that the Hong Kong stock market has risen approximately 18% this year, with the Hang Seng Index recovering to the 20,000 point level. The trading volume of Hong Kong stocks has also significantly increased, reaching a historic high of over 600 billion Hong Kong dollars in a single day in October. This year, the average daily trading volume in the Hong Kong stock market has increased by over 25% compared to last year. The total fundraising amount for new stock listings this year exceeded 80 billion Hong Kong dollars, ranking fourth globally.

The financial industry continues to thrive, with the asset and wealth management industry showing a total asset scale of over 4 trillion US dollars, and net inflows of funds growing 3.4 times last year; family office businesses are also continuously growing, with approximately 2,700 individual family offices currently operating in Hong Kong, more than half of which manage assets exceeding 50 million US dollars.

Chan pointed out that the Hong Kong housing market has gradually stabilized in recent months, with trading also increasing; in the first 11 months of this year, the average number of transactions per month was about 4,450, a year-on-year increase of 22%.

In terms of gathering popularity and financial resources, Paul Chan Mo-po introduced that this year the total number of companies from the mainland and overseas based in Hong Kong is close to 10,000, with the number of startups close to 4,700, both increasing by about 10% annually, setting new highs for both; in the past nearly two years, various talent programs have received about 410,000 applications, with over 260,000 approved, of which about 170,000 people have come to Hong Kong; this year, the number of visitors to Hong Kong exceeded 44 million, increasing by over 30% year-on-year.

Looking ahead to 2025, Paul Chan Mo-po stated that Hong Kong's economic foundation is solid and market resilience is strong, making progress in establishing a new pattern during changes. In the coming year, efforts will be accelerated in three areas, including better leveraging Hong Kong's unique advantages in internationalization, strengthening 'internal connections and external communication', and further enhancing the roles and functions of 'super connectors' and 'super value-added individuals', collaborating with other cities in the South China Greater Bay Area and other provinces in the mainland to explore opportunities and create greater synergistic effects.

Strengthening systematic investment in local innovation and technology in Hong Kong, accelerating the cultivation of new productive forces according to local conditions, including making good use of the Hong Kong Investment Management Company’s 'patient capital' to guide and leverage market funds to support the clustering and development of strategic industries. The office for introducing key enterprises has attracted nearly 70 corporate partners to Hong Kong in the past two years, and in the coming years, over 42 billion HKD is expected to be invested in Hong Kong, creating about 17,000 quality positions and driving its Industry Chain enterprises upstream and downstream to come to Hong Kong. Next, Hong Kong needs to promote more policy innovations, strengthen innovation and technology collaboration between Hong Kong and Shenzhen, as well as the entire Greater Bay Area, creating synergies that mutually promote respective advantages for better economic development and contribute more significantly to the country's high-level technological self-reliance.

Paul Chan Mo-po emphasized that with strong support from the country, Hong Kong will continue to reform and innovate, seize opportunities, accelerate integration into the national development framework, and proactively align with the national development strategy for more impressive development in Hong Kong's economy, society, and livelihood.

Investment opportunities in Hong Kong stocks.

Last week, the Hong Kong stock market fluctuated and rose, with the Hang Seng Index increasing by 1.87% over the week.$Hang Seng TECH Index (800700.HK)$With an increase of over 2%, sectors such as Electronics, Computers, and Autos led the rise.$LENOVO GROUP (00992.HK)$、$BYD ELECTRONIC (00285.HK)$up more than 10%.$SMIC (00981.HK)$Increased by over 8%, $XIAOMI-W (01810.HK)$ 、 $LI AUTO-W (02015.HK)$ Increased by over 7%,$HUA HONG SEMI (01347.HK)$、 $NIO-SW (09866.HK)$ 、 $BIDU-SW (09888.HK)$ The increase rate exceeded 3%, $BABA-W (09988.HK)$ The increase is also close to 3%.

In terms of Southbound inflow, last week the cumulative net inflow through the Stock Connect amounted to 16.4 billion HKD, with a cumulative net inflow of 92.7 billion HKD in the last month. Since the beginning of the year, the cumulative net inflow has reached 794.1 billion HKD, far exceeding the total net inflow of 318.8 billion HKD for the entire year of 2023.

Looking ahead to 2025, Galaxy Securities stated that Hong Kong stocks are likely to rise in an environment of wide fluctuations. This brokerage pointed out that Hong Kong stocks are currently valued at relatively low levels, offering strong attractiveness and high medium and long-term allocation value.

In terms of allocation, first, under the stimulation of policies such as expanding domestic demand and stabilizing Consumer, Hong Kong Consumer stocks with relatively low valuation levels are expected to rise. Second, the Technology Sector still offers high investment opportunities, especially in AI, Consumer Electronics, Semiconductors, and other sectors. After Trump's election, the importance of China's domestic self-controlled logic in Technology has increased. Meanwhile, the significance of new production capacity in China's economic development is gradually increasing, with greater policy support. Third, under the disturbances from overseas uncertainties, the high dividend strategy in Hong Kong stocks remains attractive, especially for state-owned enterprises with high dividends that are actively managing their Market Cap.

CITIC SEC pointed out that looking towards 2025, as the policies for stable growth are further solidified and basic economic data gradually validated, market confidence is expected to continue to recover, and Hong Kong stocks may enter a phase of dual repair in valuation and fundamentals. In particular, some growth sectors of Hong Kong stocks in 2025, such as biotechnology, Autos and parts, Technology Hardware, and Semiconductors, have profit expectations much higher than A-shares, further enhancing their allocation cost-effectiveness. It is determined that in 2025, domestic public funds will significantly increase their allocation to Hong Kong stocks, and their proportion of Southbound funds will also rise. Considering the historical direction of high-yield public fund allocations, the space for domestic public fund allocations, and the current state of the Hong Kong stock market, growth sectors such as Technology, Consumer Discretionary, and Pharmaceuticals may be more favored by actively managed public funds; moreover, the Diversified Finance Sector may also benefit.

Editor/rice