Hong Kong stocks rise as chipmaking frenzy offsets Beijing capital control fears

China Securities Co

26/05/2026 04:38

Updates prices

SHANGHAI, May 26 (Reuters) - The Hong Kong stock market, which reopened on Tuesday after a public holiday, rose as excitement toward chipmaking overcame jitters around Beijing's crackdown on illegal cross-border trading.

China stocks dipped as tech shares corrected, but big investment banks gained on bets they will benefit from regulators' clamp-down on brokers moving Chinese money offshore without a license.

China on Friday launched an industry-wide crackdown on illegal cross-border investment, and punished online brokers Tiger, Futu and Longbridge.

The campaign, which requires a wind-down of illegitimate trading accounts in two years, could affect as much as HK$294 billion ($37.53 billion) in Hong Kong, Kaiyuan Securities estimates.

Yuan Yuwei, hedge fund manager at Trinity Synergy Investments, said China's campaign against illegitimate capital outflows could hit Hong Kong-listed small-caps, but the impact on the broader market would be limited.

"I believe we are still in a big bull run underpinned by hard technology," he said.

Hong Kong's Hang Seng Index .HSI rose roughly 0.5% in late morning trading.

China's blue-chip CSI300 Index .CSI300 fell 0.3% by the lunch break and the Shanghai Composite Index .SSEC dropped 0.8%.

An index of Hong Kong small-caps .HSSI - which are vulnerable to reduced liquidity -  fell 2%. Shares of Bright Smart 1428.HK, a small broker in Hong Kong, tumbled 4%.

China Securities Co jumped 4% in Hong Kong 6066.HK and 6% in Shanghai. Other major Chinese investment banks .HSSCFEB, including China International Capital Co 3908.HK 601995.SS and China Galaxy Securities 6881.HK 601881.SS also rose sharply.

"Demand for global asset allocation will persist, but increasingly shift toward compliant channels," Guotai Haitong Securities said in a report, recommending major brokers with a global footprint and stakes in top mutual fund companies.

Mood in Hong Kong was also aided by a frenzy around chipmaking, after Chinese tech champion Huawei Technologies said on Monday it will make industry-leading semiconductors using a new technology in five years.

An index tracking Hong Kong-listed chipmakers .HSIT surged 6%, led by Chinese chip giants Hua Hong Semiconductor 1347.HK and Semiconductor Manufacturing International Corp 0981.HK.

"I'm very bullish toward SMIC. It's China's answer to TSMC," fund manager Yuan said, referring to the Taiwanese chip foundry.

"SMIC's strategic importance is even greater than companies like PetroChina and CATL."

In China, tech shares .STAR50 corrected after Monday's jump.

($1 = 7.8342 Hong Kong dollars)

 (Reporting by Shanghai Newsroom; Editing by Paul Simao and Mrigank Dhaniwala)

 ((Samuel.shen@tr.com))