Hong Kong capital markets performed strongly in 2024, with robust asset management, enhanced market connectivity, and high investor sentiment. ETFs, cross-listings, and Mainland market connections drove growth. The SFC granted more licenses and launched an anti-fraud campaign.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On March 6, 2025, the Securities and Futures Commission's ("SFC") Quarterly Report underscored the remarkable resilience of Hong Kong's capital markets in 2024, with key drivers including a robust asset management sector and improved investor sentiment. This period saw an upsurge in exchange-traded funds ("ETFs") with a 35% increase in average daily turnover to $18.9 billion (US$2.4 billion), representing 14% of the total stock market turnover and attracting $22.8 billion (US$2.9 billion) in net inflows. This growth was accompanied by an 11% increase in the number of ETFs to 194.Additionally, Hong Kong-domiciled funds experienced a remarkable 88% increase in net inflows to $162.9 billion (US$20.9 billion), with assets under management rising by 22% to $1.64 trillion (US$211.4 billion). These achievements were further bolstered by the cross-listing of two Hong Kong ETFs in Saudi Arabia in October, enhancing regional market connectivity.Connectivity with Mainland markets was significantly strengthened. Enhancements to the Mainland-Hong Kong Mutual Recognition of Funds scheme, effective from January 2025, and the 10-year milestone of Stock Connect, which saw a 55% increase in average daily southbound trading to $48.2 billion, were pivotal in maintaining the momentum.The SFC's Chief Executive Officer, Ms Julia Leung, highlighted the resilience and attractiveness of Hong Kong’s markets in 2024, with southbound net inflows hitting a 10-year high of $807.9 billion, and cumulative inflows nearing $3.7 trillion by the end of 2024.Licensing data indicated continued growth, with a 1.5% increase in the total number of licensed corporations and a 15% rise in license applications by the end of 2024. Furthermore, the SFC granted three more virtual asset ("VA") trading platform licenses in early 2025, bringing the total to 10. The 'ASPIRe' roadmap, outlining 12 initiatives, aims to develop Hong Kong as a global VA hub.To mitigate financial fraud, the SFC launched the 'Don’t be Sucker' anti-fraud campaign in December 2024, which has garnered significant attention with over 78,000 views on YouTube, focusing on online romance scams, impersonation, and deceptive financial influencers.The SFC’s financial health remained robust, reporting a modest surplus of $77 million for the last quarter, attributed to a rebound in Hong Kong’s stock market turnover. The quarterly report is available on the SFC’s website.
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