Asset growth, connectivity drive HK’s capital markets in 2024

ETF's daily turnover surged by 35% YoY to $18.9b.

Hong Kong’s capital markets ended 2024 on a strong note, driven by growth in its asset management sector and enhanced market connectivity amidst improving investor sentiment, according to the Securities and Futures Commission’s (SFC) Quarterly Report.

On the asset management front, the exchange-traded fund (ETFs) market made further progress, with average daily turnover for ETFs surging 35% year-on-year (YoY) to $18.9b (US$2.4b). This accounted for 14% of total stock market turnover.

ETFs recorded net inflows of $22.8b (US$2.9b) for the year, whilst their total number increased by 11% to 194.

Net inflows into Hong Kong-domiciled funds soared 88% to $162.9b (US$ 20.9b), with their assets under management up by 22% to $1.64t (US$211.4b).

Market connectivity strengthened further, particularly with the landmark cross-listing of two Hong Kong ETFs in Saudi Arabia in October. These ETFs, the largest in the Saudi market, had a combined market capitalisation of $2.1b (US$1.6b) as of December.

Enhancements to the ETF Connect scheme and the listings of several leading Mainland companies in Hong Kong since April 2024 further deepened as enhancements to the Mainland-Hong Kong Mutual Recognition of Funds scheme strongly bolstered Hong Kong fund sales after taking effect in January 2025.

Moreover, Stock Connect saw a 55% jump in average daily southbound trading to $48.2b in 2024, representing more than 18% of Hong Kong market turnover. Southbound net inflows also hit a 10-year high of $807.9b, with cumulative inflows nearing $3.7t as of December.

In addition, licensing data continued its upward trend, with the total number of licensed corporations up 1.5% and the number of licence applications up 15% as of end-2024.

The SFC also granted licences to three more virtual assets (VA) trading platforms in early 2025, bringing the total number to 10. To cement Hong Kong’s role as a global VA hub, the SFC has recently issued the “ASPIRe” roadmap, clearly setting out 12 major initiatives.

To step up investor education and combat investment fraud, the SFC in December launched a fresh anti-scam publicity campaign titled “Don’t be Sucker.” The campaign focuses on the common scam scenarios of online romance scams, impersonation, and deceptive tips from financial influencers.

Financially, the SFC also continued to manage its financial health, reporting a modest surplus of $77m for the last quarter as Hong Kong’s stock market turnover rebounded upon the Mainland’s economic support measures.