Robin Zeng, founder and chairman of Modern Amperex Expertise Co. Ltd. (CATL), third proper, strikes a gong as Paul Chan, Hong Kong’s monetary secretary, second proper, and Bonnie Chan, chief govt officer of Hong Kong Exchanges & Clearing Ltd. (HKEX), proper, applaud throughout the CATL itemizing ceremony on the Hong Kong Inventory Trade in Hong Kong, China, on Tuesday, Could 20, 2025.
Paul Yeung | Bloomberg | Getty Photographs
Traders and companies’ enthusiasm for Hong Kong’s fairness capital markets is roaring again, as Chinese language firms flocked to town for fundraising, sparking a frenzy available in the market that had been forsaken in recent times.
Outsized offers and a state-backed push for firms listed within the mainland exchanges to hunt an inventory in Hong Kong have thrust capital-raising quantity to the strongest first half-year since 2021, in line with knowledge from knowledge supplier Dealogic.
New itemizing volumes on the Hong Kong Inventory Trade jumped round eight instances to $14 billion within the first half of this 12 months, from simply $1.8 billion in the identical interval in 2024, in line with Dealogic. That excluded SPAC listings, or particular function acquisition firms established solely to boost capital by way of an IPO, with the intention of finally buying or merging with one other firm.
That places town on monitor to turn into the world’s largest itemizing vacation spot this 12 months, surpassing the Nasdaq and the New York Inventory Trade. PwC projected as much as 100 IPOs in Hong Kong this 12 months, with whole fundraising to exceed $25.5 billion.
The frenzy got here after years of lackluster IPO exercise within the metropolis amid post-pandemic risk-off sentiment and stuttering financial development.
Within the first half of this 12 months, there have been 43 new listings in Hong Kong, with proceeds topping $13.6 billion, surpassing the entire sum raised in 2024, knowledge from monetary knowledge platform Wind Info confirmed.
As compared, there have been solely 73 listings in 2023, elevating simply $5.9 billion, in line with HKEX knowledge.
The renewed curiosity is fueled by a confluence of things, together with Beijing’s regulatory tailwinds, the muted tempo of A-share listings, ample market liquidity, and delisting fears in U.S. markets, driving mainland firms to boost funds in Hong Kong, in line with Steven Solar, head of China fairness technique at HSBC.
“The IPO increase within the Hong Kong market is actually pushed by dual-listing of A-then-H [shares],” mentioned Solar. A-shares consult with mainland-listed shares, whereas H-shares are these listed in Hong Kong.
“Increasingly firms use the proceeds to fund their globalization technique,” Solar mentioned, because the Hong Kong greenback is extra fungible than the Chinese language yuan in international markets.
Beijing coverage tailwinds
A leap in Chinese language fairness costs final September, triggered by expectations of stronger financial stimulus, helped flip the tide on bearish narratives about China.
In the beginning of this 12 months, the discharge of DeepSeek’s low-cost however highly effective mannequin additional fueled a rally in Chinese language tech shares as traders started to reassess China’s capability for innovation, spurring a rerating of Chinese language equities.
“Market valuations broadly have improved again to historic common ranges, which supplies a greater backdrop for firms seeking to fundraise,” mentioned Eugene Hsiao, head of China fairness technique at Macquarie.
As of Wednesday’s shut, Hong Kong’s Cling Seng index has gained a stellar 21% to date this 12 months, making it one of many best-performing main markets globally.
Hopes that Chinese language authorities will possible unleash extra fiscal spending to defend the financial system from any trade-related shock have additional underpinned enterprise and traders’ confidence.
In an obvious shift to assist the non-public sector, Chinese language President Xi Jinping advised the nation’s prime enterprise leaders in February that the nation wants their assist to ship financial development.
That shift, coupled with the long-awaited approval by Beijing for mainland corporations to listing offshore, unleashed a wave of pent-up demand, significantly for high-quality, consumer-facing firms which are much less uncovered to geopolitical headwinds, mentioned Lorraine Tan, director of fairness analysis at Morningstar.
Chinese language securities regulator final 12 months issued a slew of measures aimed toward fast-tracking approval for eligible mainland tech firms to listing in Hong Kong. Hong Kong regulators additionally launched a so-called “Expertise Enterprises Channel” in Could to facilitate IPO approvals for specialist expertise and biotech firms, significantly these already listed within the mainland.
“Coverage encouraging main company residents to listing in Hong Kong have offered a much-needed shot within the arm” in reviving IPO exercise within the metropolis, mentioned Perris Lee, head of fairness capital market at Dealogic.
Mainland traders’ shopping for spree
One other driver for Hong Kong’s market rally has been the ample liquidity offered by mainland traders piling into Hong Kong shares, chasing a synthetic intelligence frenzy sparked by Deepseek’s breakthroughs and tapping into main capital-raising offers.
The southbound web inflows, tracked by way of the cross-border hyperlink Inventory Join scheme, surged to a file excessive within the April-June quarter, because the scheme was launched in 2014, in line with Wind Info.
In stark distinction, China’s benchmark CSI 300 has barely budged this 12 months, up 0.2% 12 months up to now, in line with LSEG knowledge.
That has prompted onshore traders to shift cash to Hong Kong-listed equities, bolstering the Southbound inflows to account for practically half of Hong Kong’s day by day inventory turnover, in line with Solar’s estimates.
A to H twin itemizing
These components helped push a flurry of mainland China-traded firms to hunt secondary itemizing in Hong Kong, together with battery maker Modern Amperex Expertise.
Already listed in Shenzhen, the corporate raised greater than $5 billion in a secondary itemizing in Hong Kong in Could, in what’s the world’s largest such providing to date this 12 months.
Among the many over 200 lively IPO candidates within the pipeline to be listed on HKEX, over 40 are firms already listed on mainland inventory exchanges, Wind Info confirmed.
Excessive-profile firms that sought a main itemizing in Hong Kong this 12 months included bubble tea retailers Mixue Group, Guming Holding and ride-hailing platform operator Caocao Inc.
“The urge for food to boost offshore funds, particularly in HKD, is a mirrored image of broader plans to increase into abroad markets,” mentioned Hsiao.
Amid cutthroat competitors at dwelling and flared-up commerce tensions with the U.S., Beijing has known as on its main firms to increase globally and diversify their manufacturing places.
Moreover, Hong Kong’s market is extra “inclusive” of rising sectors, like AI, renewable vitality, digital consumption and biotech, which align with mainland corporations’ wants, mentioned Wei Li, head of multi-asset investments for China at BNP Paribas.
The heightened U.S.-China tensions have made Hong Kong a most popular IPO vacation spot for a lot of Chinese language corporations, over issues that the Trump administration may order a delisting from U.S. exchanges.
“A secondary itemizing basically supplies additional insurance coverage for U.S.-listed Chinese language firms in an unlikely occasion {that a} delisting turns into unnegotiable,” mentioned Lee, suggesting that firms are prone to have engaged monetary advisors to hammer out a “plan B,” with or with out delisting.
