Chinese investors are driving a sharp rally in mainland bank stocks listed in Hong Kong, as they hunt for alternatives to the near-record low yields offered by government debt.

The Hong Kong shares of China Construction Bank, Agricultural Bank of China and Industrial and Commercial Bank of China have risen 36 per cent, 33.7 per cent and 25.4 per cent respectively over the past six months, beating the Hang Seng index as mainland Chinese investors pour record amounts of money into the city’s markets.

Chinese insurance companies are helping drive the rally, as they look to high-yielding assets to cover their liabilities. For many investors, banks look like an attractive substitute for government debt which, after a multiyear rally, is offering a yield of around 1.65 per cent on the 10-year note, just above the record low.