Key Benchmarks Performance
Korea’s KOSPI Composite index surged 24.0% in the single month of January, effectively doubling down on its massive 2025 gains. This explosive momentum suggests that the corporate governance reforms (“Value-up Program”) and the relentless demand for AI-specific memory solutions have created a feedback loop of institutional buying. The KOSPI’s 1-year return of 107.5% and 3-year return of 115.4% cement its position as the premier destination for global tech-focused capital in this cycle.
Close behind in technical prowess is the Philadelphia SE Semiconductor Index (SOX), which gained 12.9% in January. The Taiwan SE also maintained its critical role in the global supply chain, returning 10.7% in the first month of 2026. This synchronized movement across the “Silicon Triangle”—Korea, Taiwan, and the SOX—reflects a market that is aggressively pricing in the transition from general AI infrastructure to specific high-end manufacturing. Hong Kong Hang Seng index also deliver a strong performance in January while Shanghai Composite Index showed a stable 3.8% return in January.
Table 1: Global Key Benchmarks Performance
Source：LSEG Lipper, as of 26/01/31
Asset Types Analysis
The total 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong posted slightly positive return of 3.6% on average in January (as of 26/01/31). Across all fund types, the average returns were 20.2% (1Y), 30% (3Y), and 15.9%(5Y). Equity funds outperformed other asset types, with a 1-month return of 5.7%. Equity funds also outperformed with 1-year and 3-year averages at 31.3% and 44.2%, respectively.
Hong Kong MPF Performance Analysis by LGC
There are overall 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong market with a total 24 Lipper Global Classifications. Among all 24 classifications, Equity Korea, Equity Asia Pacific, Equity Asia Pacific ex Japan, Equity Greater China and Equity Hong Kong posted 26.7%,10.8%, 9.2%, 7.7% and 6.7% on average, separately and took the leading positions among all MPF classifications in January.
Figure1：Top/Bottom 10 Hong Kong MPF Performance by Lipper Global Classifications, Year-to-Date (as of 26/01/31)
Outlook
Hong Kong’s overall financial conditions improved notably in 2025, supported by strong external demand and robust investment. Exports delivered an impressive 13% growth despite a high comparison base, helping the economy expand 3.5%—its fastest pace since 2021—according to advance estimates from the Census and Statistics Department. This outperformed both the 2.6% growth recorded in 2024 and the government’s revised forecast, lifted further by a stronger‑than‑expected 3.8% expansion in the final quarter.
Financial markets also strengthened. The Hang Seng Index rose roughly 30% cumulatively, while the IPO market remained vibrant, with total fundraising exceeding HK$285.8 billion (US$36.57 billion). Including placements and block trades, overall share sales surged to more than US$73 billion, nearly quadrupling year‑on‑year and positioning Hong Kong as Asia’s top fundraising centre for the first time since 2013, ranking second globally behind the U.S.
Hong Kong further retained its title as the world’s freest economy and climbed to third place in global competitiveness rankings. Its export momentum largely mirrored that of mainland China—its largest trading partner—whose shipments continued to defy U.S. tariffs and pushed its trade surplus to a record US$1.2 trillion in 2025. However, both economies may face softer export growth in the year ahead as front‑loaded shipments unwind.
The stock market’s bull run contributed to a rebound in private consumption, while home prices rose 3.25%—the first annual increase in four years—reflecting improving sentiment. Yet, despite headline gains, the benefits of the recovery have not been evenly shared. Ordinary households, small and medium‑sized enterprises, and local retailers experienced limited uplift, and their near‑term outlook remains moderate.
Looking ahead, Hong Kong will draft its first five‑year development blueprint to better align with China’s forthcoming 15th Five‑Year Plan (2026–2030), marking a new phase in long‑term strategic coordination.
