(Yicai Global) Feb. 14 -- Chinese fund managers are quickly seizing opportunities in the Hong Kong market amid record-low valuations.

Some newly established mutual funds based on China's mainland have piled into Hong Kong-listed stocks that are trading at low prices after the Chinese New Year holiday this month, the Securities Times reported today.

Investors are likely to be expecting a rebound. China's economic recovery and policy support could result in a large room for valuation hikes in Hong Kong where the stock market has fallen to the lowest levels since March 2020 when the Covid-19 pandemic was most intense, said Xie Yi, fund manager at Nuode Asset Management.

Some funds are building massive portfolios in days. China Merchants CSI Hong Kong Technology Exchange Traded Fund held CNY87.4 million (USD13.7 million) worth of Hong Kong-listed stocks as of Feb. 7, or nearly 29 percent of its total assets, according to the fund manager's filing with the Shenzhen Stock Exchange on Feb. 9. The ETF was set up on Jan. 26 so the positions were created in four days.

Yinhua Hang Seng HSHKI China Tech ETF held about CNY227 million (USD35.7 million) worth of Hong Kong-listed equities as of Jan. 26, or more than 78 percent of its total assets, according to information revealed by the fund manager recently. The ETF was set up on Jan. 17.

So far the two funds are mostly focusing on stocks in the fields of information technology, telecommunications, consumer goods, and the financial sector.

Indexes show that this year, the Hong Kong market has outperformed other major stock markets around the world, said Xie. The main reason is the predicted recovery of the Chinese economy that makes the Hong Kong market fundamentals stronger than those of New York, Xie added. But higher price-to-performance ratios also play a role, he added.

The Hong Kong stock market follows the mainland's economic development so the fundamentals are almost the same, said Xie. But after valuations dived in Hong Kong last year, prices are lower than on the mainland, he added.

Editor: Emmi Laine, Xiao Yi