---
title: "CICC in \"Major Banks\": This year's Hong Kong stock market funding environment is likely to be more challenging than in 2025 and is probably not as good as the A-share market"
description: "The CICC report pointed out that Hong Kong stocks have performed poorly overall since February, with the Hang Seng TECH Index experiencing a significant decline, dragging down the performance of Hong "
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/277395187.md"
published_at: "2026-03-02T02:25:09.000Z"
---

# CICC in "Major Banks": This year's Hong Kong stock market funding environment is likely to be more challenging than in 2025 and is probably not as good as the A-share market

> The CICC report pointed out that Hong Kong stocks have performed poorly overall since February, with the Hang Seng TECH Index experiencing a significant decline, dragging down the performance of Hong Kong stocks. It is expected that the funding environment for Hong Kong stocks in 2026 will be difficult to exceed that of 2025 and may be worse than that of A-shares. Although the Federal Reserve may cut interest rates, the impact on Hong Kong stocks remains uncertain. The IPO and refinancing activities in Hong Kong are active, with an expected scale reaching 1.1 trillion yuan, far exceeding the funding needs of 2025

CICC published a report indicating that since February, Hong Kong stocks have underperformed overall, especially the Hang Seng TECH Index, which has lagged behind as a core asset. As of February 28, the Hang Seng Index fell by 2.8%, while the Shanghai Composite Index rose by 1.1% and the S&P 500 dropped by 0.9%. The Hang Seng TECH Index plummeted by 10.1%, while the STAR Market 50 and NASDAQ fell by 1.4% and 3.4%, respectively. Since its peak in October, the Hang Seng TECH Index has retraced by 20% and has continuously broken through several technical support levels. In contrast, South Korea has seen nearly a 50% increase since the beginning of the year, highlighting a stark difference. From a driving factor perspective, compared to the positive contributions from earnings and risk-free interest rates, the equity risk premium is the core reason, dragging down by 14.7 percentage points; among the constituent stocks, the top five weighted stocks contributed to a 6 percentage point decline.

Why has the Hang Seng TECH Index significantly underperformed? The market has been paying attention to the recent weakness of Hong Kong stocks, but the firm indicates that it is not surprising. In an environment where the overall credit cycle is slowing down, the remaining sectors still expanding naturally become the focus of capital pursuit. However, if their unique structure is temporarily disliked by the market, coupled with headwinds in the capital front, this performance is understandable.

Looking ahead to 2026, it will be challenging for the capital environment of Hong Kong stocks to exceed that of 2025, and it is likely to be less than that of A-shares. The reason is that compared to the net inflow of CNY 807.9 billion for the entire year of 2024, the additional scale of CNY 1.4 trillion net inflow in 2025 is largely contributed by ETFs of about CNY 300 billion and other trading-type funds such as private equity and individual investors, which are directly related to market sentiment fluctuations. Therefore, unless the market performs significantly better than expected, it will be difficult for capital to exceed last year's levels, especially with other types of funds like insurance remaining relatively stable. Additionally, although the Federal Reserve is likely to cut interest rates, there are uncertainties following the recent developments, which may cause more disturbances to Hong Kong stocks.

Hong Kong's IPO and refinancing activities remain active, with the firm estimating the scale could reach CNY 1.1 trillion, far exceeding the funding demand of about CNY 600 billion in 2025. Furthermore, the CNY 1.8 trillion scale of unlocks resulting from a large number of IPOs in 2025 may also become potential pressure on the capital front for Hong Kong stocks in 2026. The potential upside comes from foreign capital, especially long-term foreign investment. According to EPFR data, since 2025, passive foreign capital and non-European and American active foreign capital have returned, even temporarily overweighting China, but European and American long-term funds have been slow to act and remain significantly underweight. These funds are substantial, but the threshold for return is higher and often place more emphasis on fundamentals. Since the beginning of 2026, there have been some signs of inflows from European funds, and if this continues in the future, Hong Kong stocks will be more sensitive as the first stop for capital return. The firm estimates that under the EPFR criteria, if active foreign capital fully returns to the benchmark allocation for Chinese stocks, it could bring in CNY 500 billion to CNY 550 billion, roughly equivalent to the total outflow scale during the current period of foreign capital outflow from March 2022 to the end of 2025

### Related Stocks

- [STECH.HK - Hang Seng TECH Index](https://longbridge.com/en/quote/STECH.HK.md)
- [159742.CN - Hang Seng TECH ETF I](https://longbridge.com/en/quote/159742.CN.md)
- [513130.CN - Huatai-PB CSOP Hang Seng Technology ETF(QDII)](https://longbridge.com/en/quote/513130.CN.md)
- [513180.CN - ChinaAMC Hang Seng Technology ETF(QDII)](https://longbridge.com/en/quote/513180.CN.md)
- [520920.CN - Tianhong Hang Seng TECH ETF(QDII)](https://longbridge.com/en/quote/520920.CN.md)
- [03032.HK - HSTECH ETF](https://longbridge.com/en/quote/03032.HK.md)
- [00HSI.HK - Hang Seng Index](https://longbridge.com/en/quote/00HSI.HK.md)
- [513120.CN - GF CSI HK Innovative Drugs Industry ETF(QDII)](https://longbridge.com/en/quote/513120.CN.md)
- [03033.HK - CSOP HS TECH](https://longbridge.com/en/quote/03033.HK.md)
- [159740.CN - Dacheng Hang Seng Technology ETF(QDII)](https://longbridge.com/en/quote/159740.CN.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.