Hong Kong Equity Strategy Higher, but slower – normalization sets in, capital inflows as the upside lever

Research evidence excerpt

Hong Kong Equity Strategy Higher, but slower – normalization sets in, capital inflows as the upside lever

Global Markets Strategy

18 May 2026

Hong Kong Equity Strategy

Higher, but slower – normalization sets in, capital

inflows as the upside lever

Powered by a synchronized cyclical recovery and constructive liquidity Equity Macro Research

backdrop, MSCI HK has outperformed major offshore China benchmarks AC Tim Huang

by rising 13% YTD (vs. -5% for MXCN, +1% for HSI). Hong Kong’s (852) 2800-4323

recovery has been broad-based off a low starting point across housing tim.huang@jpmorgan.com

(secondary prices +15% from trough), financials (strong financing and J.P. Morgan Securities (Asia Pacific) Limited/

J.P. Morgan Broking (Hong Kong) Limited

trading activity), and consumption (retail value +12% y-y in 1Q26),

Erin Zhang, CFA

translating to an 11% forward EPS upgrade since 2025. Looking forward, (86-21) 6106 6328

our cycle analysis suggests HK is rotating from early into mid-cycle, erin.zhang@jpmorgan.com

which should temper the pace of upside but support a more sustainable SAC Registration Number: S1730521090002

growth runway. Beyond the conventional cyclicals, HK’s offshore J.P. Morgan Securities (China) Company

financing role is increasingly leveraged to China’s tech upgrade and Limited

overseas expansion agenda – advanced industries account for c.72% of HK Rajiv Batra

(65) 6882-8151

IPO proceeds since 2025 (Figure 6), reshaping the listing mix and investor rajiv.j.batra@jpmorgan.com

base while reinforcing wealth effects and growth-oriented inflows. Against J.P. Morgan Securities Singapore Private

the heightened geopolitical uncertainty, CE John Lee has also highlighted Limited

HK’s potential to absorb diversification- and -security driven capital

inflows.