​EBC Markets Briefing | HK shares rebound; AMD soared on Meta deal

Hong Kong shares were higher on Wednesday, as investors double down on what they see as the safest bet on AI. Bets on the stocks to be added to the Stock Connect link are apt to grow around this time each year.

Chinese investors bought a record HK$1.4 trillion of Hong Kong-listed shares and ETFs last year via the scheme. The Hang Seng Index was up roughly 28%, the biggest annual gain since 2017.

Southbound flows currently account for 25%-to-30% of the trading volume of HK stocks on an average day, said Morgan Stanley, in stark contrast to when Beijing cracked down on tech giants several years ago.

Alibaba's launched a campaign to distribute 3 billion yuan in incentives through Qwen. Other companies like Tencent and Baidu also competed to attract users to their flagship AI apps ahead of Lunar New Year.

China's core AI industry was estimated at $160–$170 billion last year. China has more than 5,300 AI enterprises and leads the world in generative AI patenting, with six times as many registered as the US.

Nomura said the Hang Seng Index could achieve a more moderate 8-10% return in 2026, driven by sustainable earnings growth, particularly with a mildly stronger trend in the Chinese currency.

The Hang Seng Index continued to trade above 50 SMA, but the protracted consolidation indicated diminishing bullish bias. We expect it to move below 26,600 in the short term.

Asset recap

As of market close on 24 February, among EBC major products, AMD shares led gains after announcing a multiyear deal where it will supply chips to Meta Platforms to help power its AI ambitions.

Pipeline operator ONEOK posted a fall in Q4 profit per share, hit by a sharp drop in earnings in its natural gas transportation segment linked to the 2024 divestiture of an interstate pipeline network.

TSMC shares climbed as investors continued to favour semiconductor companies tied to expanding artificial intelligence infrastructure demand. That helped propel Taiwan stock market higher.

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