Core Insights - The year 2025 is marked by strong development in Chinese assets, with a significant increase in trading volume in the Hong Kong stock market and the Stock Connect program [1] - Daily trading volume in the Stock Connect surged from HKD 48.2 billion in 2024 to HKD 121.1 billion in 2025, representing over a 100% increase [1] - Mainland investors have become a crucial trading force in the Hong Kong market, with Stock Connect trading volume accounting for 24.2% of the total trading volume in 2025, up from 18.3% in 2024 [1] Group 1: Market Overview - By the end of 2025, 588 stocks were included in the Stock Connect, representing 24.5% of the Hong Kong main board stocks and 88% of the market capitalization, with these stocks accounting for 93% of the total trading volume [3] - The Stock Connect facilitates easier access for mainland investors to diversify their asset allocation in the Hong Kong market [3] Group 2: Sector Performance - The composition of sectors within the Stock Connect has shifted, with significant increases in materials, information technology, and healthcare, while non-essential consumer, telecommunications, and utilities saw a decrease in their share [5] - The healthcare sector, led by biopharmaceuticals, saw its market capitalization share in the Stock Connect rise from 4.4% at the end of 2024 to 5.8% at the end of 2025, with 15 new stocks added, totaling a market cap of nearly HKD 190 billion [8] - The materials sector also gained attention, with several key stocks added to the Stock Connect, resulting in over a 200% increase in total market capitalization compared to 2024 [8] - The information technology sector experienced the most significant growth in total market capitalization within the Stock Connect, driven by trends in AI, robotics, and semiconductors [8] Group 3: ETF Developments - The number of ETFs included in the Stock Connect increased to 23 by the end of 2025, enhancing investment options for investors [9] - The expansion of ETFs included more thematic indices, such as biotechnology, and introduced indices with a higher proportion of foreign stocks, broadening the investment scope from Hong Kong to global markets [11] - As of December 31, 2025, the ETFs with the highest proportion of holdings through the Stock Connect were primarily those related to the Hang Seng Technology Index [12] Group 4: Future Potential - Since the launch of the Stock Connect in 2014, it has evolved from a single stock trading channel to a comprehensive investment platform that includes ETFs, bonds, and interest rate swaps [14] - The Hong Kong Stock Exchange continues to optimize market liquidity and trading mechanisms, which is expected to positively impact Stock Connect trading [14] - Regulatory support for various reform measures has been expressed, aiming to enhance product diversity and improve trading mechanisms [14][15]

Core Insights - The "Southbound ETF Connect" is expanding, with 6 new products being added to the list, increasing the total from 17 to 23 [1][7] - The total number of products under the "ETF Connect" will rise from 265 to 271 [1] Group 1: Expansion Details - The new ETFs will officially be included in the Southbound ETF Connect starting November 10 [2] - The newly added ETFs include products from two institutions: Southern Asset Management and China Merchants Securities Asset Management [7] - The new ETFs cover a diverse range of asset classes, including those that are not solely Hong Kong stocks, marking a significant development in the product offerings [7][8] Group 2: Market Performance - The average daily trading volume of the Southbound ETF Connect has exceeded 4.2 billion HKD, reflecting a year-on-year increase of 128% [9][10] - The Southern Asset Management's Hang Seng Technology Index ETF has a market share of 90% among all Southbound ETFs, indicating its popularity and strong capital attraction [10] Group 3: Advantages of Southbound ETF Connect - The Southbound ETF Connect offers significant advantages, such as longer trading hours, T+0 trading support, and a lack of price limits, enhancing capital efficiency for investors [10] - The program utilizes the Hong Kong Stock Connect quota, which is relatively ample, and benefits from a mature market-making system that keeps premium rates low [10]

Core Viewpoint - The "Southbound ETF Connect" is expanding, with 6 new products being added, increasing the total from 17 to 23 ETFs, enhancing investment options for investors in the Hong Kong and mainland markets [2][4][8]. Group 1: Expansion Details - On October 31, the Shanghai and Shenzhen Stock Exchanges announced the adjustment list for the "Southbound ETF Connect," effective from November 10 [2][4]. - The total number of ETFs under the "ETF Connect" will increase from 265 to 271 [2]. - The newly added ETFs include products from two institutions, with five from Southern Eastern and one from China Merchants Securities Asset Management [8][11]. Group 2: New Products Overview - The new ETFs include: - 工银南方中国 (ICBCCSOPCHINA) - 南方恒生生科 (CSOP HSBIOTECH) - 招商恒生科技 (CMS HS TECH) - 南方港股通 (CSOP HKCNCON) - 南方东西精选 (CSOP EWSELECT) - 南方港美科技 (CSOP HKUSTECH) [6][7]. - Notably, the Southern Eastern FTSE East-West Select ETF and Southern Eastern Hang Seng US Technology ETF include non-Hong Kong assets for the first time [8]. Group 3: Market Performance - The average daily trading volume of the "Southbound ETF Connect" exceeded HKD 4.2 billion, marking a year-on-year increase of 128% [9][10]. - Since the launch of the "ETF Connect" in July 2022, trading activity has been robust, with the investment scope expanding to include eligible ETFs [10]. Group 4: Advantages of Southbound ETF Connect - The Southbound ETF Connect offers significant advantages, including longer trading hours, T+0 trading support, and a mature market-making system that results in lower premium rates [11]. - The ongoing deepening of the mutual market access is expected to provide substantial growth opportunities for the number and structure of ETFs in the future [11].