HKEX CEO warns against over-concentration on AI and tech firms

HKEX CEO Tse Yiu-ting says tech stocks now account for 43% of daily turnover, up from 20-25%, but warns against market over-concentration on AI. She vows to ensure inclusivity for other sectors and smaller firms, while exploring tokenisation of real-world assets and carbon credits.

Hong Kong Exchange (HKEX) Chief Executive Tse Yiu-ting said the proportion of technology stocks in daily turnover has risen from about 20 to 25 per cent to around 43 per cent in recent years, reflecting a shift in investor risk appetite. Speaking at an event, she noted that artificial intelligence (AI) has become a mainstream sector, driving strong demand for capital raisings by tech new listings.

However, Tse said recent meetings with investors and potential listing firms in the United States showed that the US market has become overly concentrated on AI, with higher market capitalisation thresholds creating challenges for companies that fail to attract investor interest. She stressed that as an exchange, HKEX does not want the market to focus solely on technology and AI firms. Going forward, it will ensure that while welcoming tech companies, other industries and lower-capitalisation firms are not neglected, maintaining market inclusivity.

Tse also said the exchange has been closely monitoring the development of tokenised assets but noted that significant challenges remain in enabling such assets to trade on the exchange. She said tokenised stocks are similar to depositary receipts, particularly unsponsored depositary receipts, where a third party aggregates multiple assets from another issuer through blockchain processing. This can create price discrepancies and two separate liquidity pools.

The exchange will focus on real-world assets (RWA) and develop a tokenisation platform using blockchain technology to offer tokenised RWAs issued by the exchange or third parties. Tse added that carbon credit products have reached a relatively mature stage and are worth further exploration.