Jan 6, 2026, 11:58 GMT+7
By Hudson Lockett
Reuters - Hong Kong's Hang Seng Indexsurged nearly 28% in 2025, easily besting gains of 24% and 18% by Japan's Topixand China's CSI 300. Yet valuations in the city lag: its stock market benchmark trades at about 1.2 times book value, per data provider Wind, compared to multiples of 1.7 and 1.5 for its Japanese and Chinese counterparts. That highlights an opportunity for the Asian financial hub to follow neighbouring markets' examples with a value push of its own.
Campaigns led by officials in Beijing, Tokyo and Seoul are starting to pay off. The Chinese government last year pressured state firms to boost dividend payments and announced a 300 billion yuan ($42.6 billion) lending scheme to support buybacks. That put combined buybacks and dividends on a course to rise 20% annually to 3.6 trillion yuan, per Goldman Sachs. And while South Korea's new ruling party overhauled its companies law in 2025 to make boards more accountable to shareholders in a bid to boost returns, a governance push in 2024 by Hong Kong Exchanges and Clearing left tycoons' influence over corporate directorships largely intact.
The city's laissez faire government is unlikely to wade into the fight for better shareholder returns. Instead, the $65 billion bourse operator under Chief Executive Bonnie Chan could follow the light-touch lead of Tokyo's exchange, which relies on non-binding guidelines to lean on listed firms to boost valuations and improve disclosures: By publishing a list of the companies that comply, it effectively names and shames those that don't.
Running the same playbook in Hong Kong won't augur a boom in consolidation or delistings like that seen in Japan, where fair M&A standards published by the government have emboldened private equity to help drive efficiency gains. But it would paint an exchange-sanctioned target on the backs of companies that don't boost their valuations.
As with Japan's largest publicly traded company, the $340 billion Toyota Motor 7203.T , some of Hong Kong's biggest and most popular listings might still do as they please. Technology giants Alibabaand Tencent, for instance, both have gobs of cash they could return to investors but, with relatively healthy valuation multiples, look unlikely to get named or shamed under such a scheme.
Big Hang Seng Index component stocks tied to Hong Kong's property tycoons, however, could face more meaningful pressure. Among such firms now trading below book value: CK Hutchison, CK Asset, Wharf Real Estate, Henderson Landand Sun Hung Kai Propertiesper LSEG . The moguls may grumble at the attention, and tough geopolitics may make it tricky for some to unlock value, but investors will cheer.
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CONTEXT NEWS
Hong Kong's benchmark Hang Seng Index trades at about 1.2 times book value, compared to 1.7 for Japan's Topix, and 1.5 for China's CSI 300, per data provider Wind

Sumber : Reuters