MAINLAND investors have driven Hong Kong’s stock surge in November, buying a record amount of equities in the city even as concern grows that the rally is starting to lose momentum.

Net flows into Hong Kong’s stock market reached 70 billion yuan (US$10.6 billion) this month, the most since mainland regulators opened the first investment channel to Hong Kong’s shares in 2014. That has seen the Hang Seng Index jump 3.3 percent in November as heavyweights Tencent Holdings Ltd. and Ping An Insurance (Group) Co. helped it touch a decade-high.

But despite the vote of confidence from across the border, signs of fatigue are growing.

After failing to hold gains above the key 30,000-point level, the Hang Seng headed Thursday for its steepest four-day decline in two months. With only one month left in 2017, investors may look to cash in some of their winnings from the index’s 33 percent rally this year. On top of that, there’s concern mainland regulators will curb the pace of flows into Hong Kong equities.

“The benchmark may have hiked too fast,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Funds are likely to become less aggressive and take profit toward year-end as they probably have achieved full-year targets.”

Last week’s wider pullback was triggered in part by concerns the Central Government is growing uncomfortable with the large flows from the mainland into Hong Kong.

The mainland’s securities regulator has stopped approving mutual funds that plan to invest mainly in Hong Kong stocks, people briefed on the matter said earlier last week.

(SD-Agencies)