Hong Kong ETP Turnover Surges as AI and Chip Trades Dominate
Hong Kong's exchange-traded product market has climbed to fourth globally as surging appetite for semiconductor and artificial intelligence plays draws heavy international capital, reshaping the city's equity trading landscape.
Hong Kong has overtaken rivals to become the world’s fourth-largest market for exchange-traded products, driven by a sharp 28 percent jump in average daily turnover during the first half of the year. Investors traded an average of HK$48.4 billion (US$6.2 billion) in ETPs daily between January and June. This activity captured a record 17 percent share of total exchange turnover, a dramatic rise from just 6.2 percent a decade ago.
The rapid expansion is largely attributable to intense demand for exposure to artificial intelligence and semiconductor companies. Ding Chen, an independent director of Hong Kong Exchanges and Clearing, told a financial summit on Thursday that this momentum will persist through the second half of the year. This sustained demand pipeline is effectively bolstering the city's broader wealth management industry.
The composition of the inflows underscores a meaningful shift in Hong Kong's financial ecosystem. Foreign money now makes up 54 percent of ETP inflows, a metric that signals growing confidence from overseas allocators. “International investors represent 54 per cent of such inflow, indicating Hong Kong’s status as an international wealth management centre has been on the rise,” Ding said.
The structural growth is concentrated among dominant issuers managing the complex index-tracking and leveraged products that make up the ETP category. CSOP Asset Management, where Ding serves as chief executive, controls the largest slice of this business with a 39 percent market share. More than 200 ETPs are currently listed on the exchange, providing global funds a highly liquid gateway to trade Asian technology themes without taking on single-stock risk.
For market professionals, the shift is significant because ETPs are increasingly dictating broader liquidity and volume patterns across Hong Kong equities. As AI-related trades continue to dominate global macro strategies, the city's ability to capture this flow provides a vital pillar for its market structure. “Hong Kong has already risen to become the fourth largest ETP market worldwide, after reporting a record of rapid development over the past decade,” Ding noted.
