Core Viewpoint - The Hong Kong Stock Exchange (HKEX) is witnessing a significant shift in foreign investment sentiment towards Chinese assets, moving from a stance of avoidance to one of necessity, driven by China's policy stability and technological advancements [1][3]. Group 1: Investment Trends - Foreign capital is increasingly viewing Chinese assets as essential, with a notable change in investment logic from "Anything But China" to "Buy China" [3]. - In the first half of the year, HKEX reported a new stock financing amount of HKD 1,094 billion, reclaiming the top position among global exchanges [2]. - The average daily trading volume in the securities market reached HKD 2,402 billion, a year-on-year increase of 118% [2]. Group 2: Supply and Demand Dynamics - The supply side is robust, with over 200 companies currently processing IPO applications, nearly half of which are technology firms [2]. - A significant highlight on the demand side is the substantial return of foreign capital, with foreign investors participating in 70-80% of certain IPOs [2][3]. - The shift in global asset allocation strategies, influenced by geopolitical tensions and trade protectionism, is prompting investors to diversify away from USD assets towards Hong Kong stocks [2][3]. Group 3: Institutional Innovation - HKEX is committed to optimizing its institutional framework to meet diverse financing needs, exemplified by the introduction of the 18A and 18C listing rules, which allow biotech and specialized technology companies to go public [5]. - The 18C rule has already seen three companies listed and over ten applications submitted, indicating growing market acceptance [5]. Group 4: Market Connectivity - The "A+H" listing model has created a positive feedback loop, with average trading volume for "A+H" companies in A-shares increasing by approximately 15% this year [6]. - HKEX aims to enhance its product offerings in fixed income, foreign exchange, and commodities to better compete with global markets [6]. - Future plans include expanding the range of products available through the Stock Connect, including ETFs and bonds, to facilitate greater market integration [6][7].

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) is witnessing a significant shift in foreign investment sentiment towards Chinese assets, driven by the increasing attractiveness of these assets and the demand for diversified global capital allocation [1][2][3] Group 1: Investment Trends - Foreign capital is transitioning from a passive to an active approach in investing in Chinese assets, with a notable increase in foreign participation in IPOs, exemplified by a large domestic company's IPO where foreign subscription reached 70-80% [2][3] - The global asset allocation logic is changing, with investors moving away from USD assets due to geopolitical tensions and trade protectionism, leading them to consider Hong Kong stocks as a viable alternative [2][3] - The investment logic for foreign capital is shifting from "Anything But China" to "Buy China," indicating a growing confidence in Chinese assets [2][3] Group 2: Market Performance - HKEX reported impressive performance in the first half of the year, with new stock financing reaching HKD 109.4 billion, reclaiming the top position among global exchanges, and an average daily trading volume of HKD 240.2 billion, up 118% year-on-year [1][2] - The average daily trading volume for Hong Kong stocks is projected to rise from approximately HKD 1 billion in 2023 to HKD 1.3 billion in 2024, and further to HKD 2.4 billion in the first half of 2025, with foreign capital accounting for about 70% of the trading volume [3][4] Group 3: Institutional Innovation - HKEX is committed to optimizing its institutional framework to meet the diverse needs of enterprises and investors, with recent innovations such as the introduction of Chapter 18A and 18C allowing biotech and specialized technology companies to list without prior revenue [4][5] - The introduction of these new listing rules reflects HKEX's proactive approach to align with long-term investor demands and support early-stage financing for innovative companies [5][6] Group 4: Market Connectivity - The IPO boom in Hong Kong is positively correlated with the A-share market, with "A+H" listings creating a virtuous cycle between the two markets [5][6] - HKEX aims to enhance its product offerings in fixed income, foreign exchange, and commodities to better compete globally, as current offerings are limited compared to US markets [6] - Future plans include expanding the range of products available through the Stock Connect program, such as ETFs and bonds, to facilitate greater access for foreign investors [6]