HKEX Southbound Stock Connect Inclusion Trading Surge as March 9 Index Review Looms

Hong Kong investors are flocking to pre-market trades on stocks likely to be added to the Southbound Stock Connect, expected to be reviewed March 9–10, 2026. The strategy involves buying inclusion candidates and selling deletions, with historical gains averaging 27% around the announcement of Hang Seng Composite Index (HSI) reshuffles. Eligibility is based on HSI constituents and other authorities’ reviews, with the March 9 effective date shortening the typical trading window due to the upcoming Lunar New Year. Morgan Stanley recommended buying 44 potential additions and selling 25 deletions, entering Feb 9 and exiting March 9; Mizuho has a similar 48-addition/28-deletion list. Chinese investors added a record HK$1.4 trillion ($179 billion) via the Stock Connect last year, and southbound flows now account for 25%–30% of daily trading volume. Despite earlier entry and heightened timing risk, the strategy remains attractive as inclusion can be a major catalyst for share price movement.