The tech index, though, suggests that Hong Kong is looking to shore up its position as the geopolitical fallout spreads.
“The tech sector has become increasingly important for the Hong Kong market,” said Daniel Wong, director and head of research and analytics at HSI. “We hope the move will help attract more tech companies to list in Hong Kong.”
“Hong Kong’s stock market is becoming more tech-heavy, and that’s good for its status as an international financial center,” said Kenny Tang, co-founder and chief executive for Hong Kong-based Royston Securities.
But the influx of Chinese tech firms in recent months has dominated trading. Tencent, Alibaba and Meituan, for example, were the most actively traded stocks in the city last month, accounting for more than 20% of the total turnover. Only Tencent is currently listed on the city’s benchmark index.
“The coming of Chinese tech companies to Hong Kong will fundamentally transform the city’s stock market,” Tang said.
Other analysts have pointed out that Hong Kong’s role as a global business hub has been evolving as China takes greater control of the semi-autonomous region. Brock Silvers, chief investment officer for Adamas Asset Management, told CNN Business last week that the city could find “new relevance” as a center for Chinese finance.
Investors apparently like the new direction. Alibaba’s stock has jumped more than 35% since it first started trading in Hong Kong last November. JD.com and NetEase, meanwhile, are up 7% and 15%, respectively, since they listed last month.
More companies could consider Hong Kong listings. More than 30 US-listed Chinese companies meet requirements for a secondary listing in Hong Kong, including Pinduoduo and Baidu, according to data provider Refinitiv.