Hong Kong’s equity capital markets are seeing the most action in years, with multi-billion dollar deals lifting the mood and fueling anticipation about more deals to come.\n\n“I don’t think we have seen this kind of excitement for Hong Kong and China for a long time,” said Cathy Zhang, head of Asia-Pacific equity capital markets at Morgan Stanley.\n\nInitial public offerings and additional share sales in the city have fetched US$26.5 billion (RM112.7 billion) so far in 2025, compared with just US$3.8 billion a year ago and the most since 2021, which was a record year, data compiled by Bloomberg show.\n\nThree US$5 billion-plus share offerings by Chinese giants have driven the boom. The most recent was battery maker Contemporary Amperex Technology Co’s listing, the biggest worldwide this year. That was preceded by Xiaomi Corp and BYD Corp selling over US$11 billion worth of new stock combined in March.\n\nIf fast-fashion giant Shein Group Ltd goes ahead with an IPO in Hong Kong instead of London, it would be yet another high-profile deal for the city.\n\nDespite global unrest, trade war threats and persistently sluggish demand in China, investors are clamoring for a piece as valuations are still attractive.\n\n“ heating underway, not just in trade flows, but in capital allocation,” said James Wang, head of Asia ex-Japan equity capital markets at Goldman Sachs Group Inc. “Incrementally, we’re seeing capital flow out of the US and into select emerging markets, including India and Hong Kong.”\n\nHong Kong is poised to be a beneficiary of the strained ties between Washington and Beijing, as Chinese companies shift their IPOs to the city, helping to lift sentiment, according to Bloomberg Intelligence strategist Marvin Chen. That view is shared by former Morgan Stanley Asia chairman Stephen Roach.\n\nA large chunk of Hong Kong’s pipeline consists of mainland China-traded firms looking to sell shares in the city, encouraged by regulatory support for such deals, and as markets onshore remain slow for fundraising.\n\nCATL is rare in that it is trading at a premium to its shares in Shenzhen, having risen about 16% since its Hong Kong introduction in May. Jiangsu Hengrui Pharmaceuticals Co, which raised US$1.3 billion in a Hong Kong listing last month, also briefly rose above its A-shares in Shanghai on its debut. This could further encourage China-traded companies to consider listings in Hong Kong.\n\n“The CATL listing is setting positive momentum for the Hong Kong market and we would advise our clients that now is a good time to go ahead with their capital market plans,” said Shi Qi, China International Capital Corp’s deputy head of capital markets.\n\nStill, a note of caution: It won’t be a “straightforward market rally,” she said.

Action in Hong Kong equity markets stirs most excitement in years

Hong Kong's equity capital markets have seen record activity in 2025, with $26.5 billion in IPOs and share sales, the most since 2021. Chinese companies like Contemporary Amperex Technology Co (CATL) and Xiaomi Corp have driven the boom, while global investors seek opportunities amid trade tensions and sluggish Chinese demand. The market is benefiting from regulatory support and shifting IPO strategies, with CATL trading at a premium to its Shenzhen shares.