Prominent financial leaders from Wall Street have identified mainland China, Hong Kong, Japan, and India as key regions expected to attract substantial capital from international investors in the coming years. This anticipated influx is primarily motivated by a strategic shift towards diversifying portfolios away from US-dollar-denominated assets, coupled with the pursuit of compelling growth prospects prevalent across these Asian economies.
During a panel discussion at the Global Financial Leaders' Investment Summit in Hong Kong, David Solomon, Chairman and CEO of Goldman Sachs, emphasized China's pivotal role as one of the world's largest and most significant economies. He asserted that global capital allocators would consistently maintain interest in China, irrespective of the prevailing economic climate. This summit, an annual event organized by the Hong Kong Monetary Authority, brought together over 300 leading financiers, underscoring the importance of these discussions.
Solomon's remarks, delivered during a session focused on market trends, opportunities, and risks, projected an optimistic outlook for both Hong Kong and mainland Chinese equities. He noted a significant re-engagement by international investors, with approximately 80 percent redirecting their investments to Chinese stocks since the previous year. This movement has recovered a substantial portion of the capital lost between 2020 and 2022, a period marked by a downturn in China's property market and the widespread impact of the COVID-19 pandemic. The resilience and potential for recovery in these markets are evidently drawing renewed attention from global financial players.
Hong Kong's benchmark Hang Seng Index has demonstrated remarkable strength this year, climbing 35 percent and positioning itself as one of the top-performing major indices globally. This surge has been significantly buoyed by the strong performance of Chinese technology companies. A notable example is the artificial intelligence start-up DeepSeek, whose cost-effective and highly efficient AI models garnered international recognition earlier in the year, further stimulating investor confidence in the sector. The Hong Kong stock exchange has also seen a dramatic increase in daily turnover, reaching HK$256.4 billion (US$33 billion) in the first nine months, a 124 percent jump from the previous year, signaling robust market activity.
Ted Pick, Chairman and CEO of Morgan Stanley, echoed these sentiments, highlighting Hong Kong and China as central to the investment narrative for those who believe in markets that reward strong companies and where strategic differentiation holds value. He pointed out that numerous Chinese companies across fields such as AI, robotics, electric vehicles, and biotechnology have successfully secured funding in Hong Kong to fuel their expansion. These companies, he added, are not merely domestic leaders but are emerging as global contenders, swiftly establishing themselves among the world's top enterprises by listing in Hong Kong and raising capital.
Data from the London Stock Exchange Group reveals that new share sales in Hong Kong experienced a 220 percent increase in the first nine months, with 66 firms collectively raising US$23.27 billion on the main board. A prime example is Contemporary Amperex Technology, the world's leading manufacturer of EV battery packs, which completed a US$5.24 billion initial public offering in May, marking the largest IPO in Hong Kong this year. This strong performance positions Hong Kong's main board to potentially reclaim its status as the world's largest IPO market in 2025, a title it last held in 2019 before being affected by social unrest and the pandemic. Mike Gitlin, President and CEO of Capital Group, further reinforced this perspective, noting a continued trend among investors to diversify into non-US dollar assets, which is expected to channel more capital towards Asia. Julia Leung Fung-yee, CEO of Hong Kong's Securities and Futures Commission, highlighted the rapid growth in regional markets, with the MSCI Asia-Pacific Index rising 20 percent, predominantly driven by Hong Kong, mainland China, India, Japan, and Southeast Asia. Pick concluded by expressing enthusiasm for the diverse opportunities in Hong Kong, China, Japan, and India, acknowledging their distinct growth trajectories—such as Japan's corporate governance reforms and India's infrastructure and deregulation efforts—all contributing to a vibrant global Asian investment story.