CLSA has issued a research report announcing an increase in its allocation to Hong Kong equities to 20% overweight. Key considerations include the reduced correlation between Hong Kong and mainland Chinese markets, allowing for differentiated portfolio strategies. The Hong Kong IPO market is projected to outperform its 2025 results this year, following total fundraising of $82.3 billion from IPOs and secondary offerings last year. Additionally, Hong Kong's property market has recorded its first year-on-year price increase since 2021, with the recovery expected to stimulate stock market performance.

Furthermore, corporate earnings forecasts for Hong Kong-listed companies turned positive starting July 2025, ranking second only to Japan, South Korea, and Taiwan within the Asia-Pacific region. Hong Kong equities also offer attractive valuations relative to regional peers, with a price-to-earnings ratio of 16.7 times, slightly below the 35-year average of 17.2 times. Excluding China and ASEAN markets, Hong Kong’s stock market remains the furthest from its historical peak, indicating potential for catch-up growth.

The report identified several top picks, including WH GROUP (00288), AIA (01299), HKEX (00388), Sun Hung Kai Properties (00016), CK Hutchison Holdings (00001), Techtronic Industries (00669), and Galaxy Entertainment (00027), all of which received "Outperform" ratings. Among these, WH GROUP was designated as a "High Conviction" stock.