HKEX Insight

Stock Connect is a valuable cross-market investment channel – and a growing one at that.

Southbound Stock Connect provides a channel through which investors in Mainland China can trade Hong Kong-listed stocks and ETFs and diversify their investments. Average daily turnover (ADT) on the Southbound channel has grown on an annual basis in six of the past nine years.

Southbound ADT reached HK$38.3 billion ($4.9 billion) over the first three quarters of 2024, accounting for 16.9% of the total turnover of the Hong Kong market. Learn more about trends and prospects for Southbound Stock Connect now.

Northbound Stock Connect enables international investors to trade stocks and ETFs listed on Mainland China markets, via Hong Kong, fostering diversification and cross-border capital flow. ADT on the Northbound channel so far in 2024 has already surpassed pre-Covid levels – and that’s just through September.

Northbound’s RMB123.3 billion ($16.9 billion) in ADT over the first three quarters of 2024 represents a more than 24-fold increase from 2016.

Increased investor participation in Southbound Stock Connect is fuelling a steady growth in holdings, as the programme’s rising portfolio value shows. Following the steady development of Stock Connect, more and more Mainland investors are conducting cross-border investment through Southbound, establishing a portfolio value of holdings in the trillions.

In the two years since exchange traded funds (ETFs) were brought into Connect, the trading volume of ETFs has steadily risen. Cumulative trading volumes for Northbound ETFs and Southbound ETFs reached RMB356 billion and HK$1.05 trillion, respectively, as of September 2024.

The number of eligible ETFs also continues to grow, from 83 to 225 for Northbound and from four to 16 for Southbound. The most recent expansion of eligible ETFs took effect in July 2024. Explore the latest ETF eligibility rules now.

As of the end of September 2024, Stock Connect includes eligible stocks that account for around 90% of the total market capitalisation and more than 80% of the trading volume of the three stock markets in Shanghai, Shenzhen and Hong Kong.

Visit the Connect Hub for more.