Investors from mainland China have spent billions of dollars buying beaten-down shares in Hong Kong-listed companies subject to a U.S. government blacklist.
Buyers using a trading link known as Stock Connect have bought the equivalent of a net $15.8 billion in Hong Kong shares in the first nine trading days of this year, according to Wind, with a heavy concentration on stocks targeted by the U.S.
More than a quarter of the funds went to China Mobile Ltd. , the country’s largest telecommunications carrier, while investments in oil major Cnooc Ltd. accounted for nearly one-tenth of total inflows in the period to Jan. 14.
The overall net southbound buying through Stock Connect is likely to hit a record for January, since it is already nearly 90% of the record hit in March.
Justin Tang, the head of Asian research at United First Partners, said the U.S. sanctions offered a good buying opportunity for non-American investors. “All these investors who can hold on to these Chinese stocks are snapping up bargains,” he said.