Goldman Sachs estimates net southbound flows from Chinese mainland to Hong Kong via two cross-border stock links will hit 54 billion U.S. dollars in 2017, up from 32 billion U.S. dollars in 2016, Kinger Lau, chief China strategist at Goldman Sachs, said here on Tuesday.
Southbound net flows have exceeded 8 billion U.S. dollars so far this year, outpacing ETF and active flows and becoming the most important source of capital inflows to the Hong Kong market, said Lau.
Since the inception of the first stock link in November 2014, a total of 57 billion U.S. dollars of southbound net buying has been recorded, compared with 30 billion U.S. dollars for northbound via the two stock links, namely the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, said a Goldman Sachs report.
Goldman Sachs believes one of the reasons for rising southbound flows is long-term asset diversification demand in a scenario where the mainland's per capita income reaches around 10,000 U.S. dollars roughly by 2020 based on Goldman Sachs estimate.
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