Hong Kong Markets Surge as China Focuses Global Investors

Hong Kong’s equity markets are experiencing a robust resurgence, fueled by global investors keen on China. This rally is further energized by anticipation surrounding a possible initial public offering by Shein in the latter half of the year, signaling a potential shift in the region’s financial landscape.

Capital Inflows Revive Hong Kong’s Markets

Equity capital markets in Hong Kong rebounded strongly during the initial six months of 2025, according to a recent report. This upswing, largely driven by global investors directing their attention toward China and substantial capital raises, marks the strongest first half since 2021.

Fast-fashion giant Shein is reportedly planning a Hong Kong listing before the year’s end. Such a move would help re-establish the city’s status as a key fundraising hub amid the volatility created by U.S. trade policy changes.

“The new era has come which is a more divided world – I think that’s reality we are facing.”

—James Wang, Head of Asia ex-Japan equity capital markets at Goldman Sachs

Across Asia, there was a 15.3% rise in overall equity issuance during the first half, reaching $116.2 billion from $100.7 billion the prior year, per LSEG data. A more recent report from the Hong Kong Stock Exchange showed that the average daily turnover in the first quarter of 2024 increased by 6.9% year-on-year to HK$125.2 billion (HKEX, April 2024).

Challenges and Opportunities in the Market

Despite the positive momentum, investors remain cautious about IPOs due to ongoing global market volatility. Dealmakers also highlighted that substantial deals, such as those by battery maker CATL and electric vehicle makers Xiaomi and BYD, have played a role in boosting equity transactions, with global investors taking advantage of liquidity events to increase exposure.

Sunil Dhupelia of JPMorgan, noted an increase in engagement from global investors regarding the Hong Kong and mainland China pipeline.

China’s Economic Outlook

In May, China reduced its benchmark lending rates, the first such cut since October. This action by authorities aimed to mitigate any impacts from the Sino-U.S. trade dynamics.

“I think investors are also taking some comfort that China still has chips in their bag that they can play to support the market, such as supportive policy measures.”

—Aaron Oh, UBS’s head of equity capital markets for Asia Pacific

Goldman Sachs led Asia’s equity capital market league tables during the first half, followed by Morgan Stanley and JPMorgan, data from LSEG indicated.