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Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Hong Kong’s standing as a worldwide monetary hub has been dealt a number of blows in recent times. First got here clashes between police and pro-democracy protesters forward of a nationwide safety legislation, handed by Beijing in 2020, that severely curtailed political freedoms within the metropolis. That was adopted by a prolonged interval of draconian Covid-19 lockdowns. With the entrepot’s economic system tied to fortunes on the mainland, China’s property market crash and its ensuing deflationary slowdown have made issues worse. The previous 5 years have been characterised by tales of multinationals souring on the town and dwindling investor exercise. This yr, nonetheless, the outlook has brightened.
Hong Kong’s fairness market is within the midst of an encouraging turnaround. Within the first half of 2025, it was the world’s primary itemizing venue, elevating $13.9bn in preliminary public choices and secondary issuance, in response to information compiled by KPMG that excludes particular function acquisition firm offers. Over 200 corporations utilized for listings on its inventory change within the first six months of the yr. In June, 75 corporations utilized — a report quantity for a single month.
Current exercise has been dominated by secondary listings of Chinese companies, together with electrical battery group CATL, which raised $5.3bn. On Tuesday the FT reported that the Singapore-based on-line retailer, Shein, had confidentially filed for a Hong Kong IPO too, amid drawn-out efforts to record in London.
A confluence of things is behind the revival in offers. First, the breakthrough of DeepSeek — a Chinese language synthetic intelligence start-up — in January inspired mainland retail buyers to plough cash into the Hong Kong Trade through the inventory join with the Shanghai Inventory Trade, as they sought publicity to tech shares. That has boosted liquidity and inventory costs. The Grasp Seng index has risen over 20 per cent this yr.
Second, regulatory dangers in China — and larger scrutiny of Chinese language corporations within the US — have strengthened the town’s place as a go-between for corporations looking for to increase internationally with out the mainland’s capital restrictions. The Hong Kong Trade has additionally established separate itemizing routes for specialist tech corporations, and up to date visits to the town by mainland policymakers have helped persuade buyers that Beijing views it as a key offshore capital market, slightly than a menace to different Chinese language hubs.
The IPO growth illustrates how a fillip to investor sentiment, mixed with current geographic benefits, can catalyse inventory market exercise — sparking hope, and inspiration maybe for London. Nonetheless, it’s too early to assert that the town’s world standing is sustainably on the up once more. New listings are but to considerably broaden out past Chinese language corporations. Worldwide banks, legislation companies and firms stay cautious over hiring and funding as they attempt to navigate tensions between the west and China. Beijing’s grip on native politics fuels considerations across the rule of legislation, which had beforehand been considered one of Hong Kong’s major promoting factors in comparison with the mainland.
Town’s broader financial surroundings stays weak too, partly as a result of the lack of some companies and staff has left it extra depending on the Chinese language economic system. Retail and vacationer spending exercise continues to be beneath pre-pandemic ranges. Personal sector confidence dropped to its lowest stage in close to five years on the finish of the second quarter, in response to S&P International.
The latest rebound in IPO exercise is much less an indication of an enduring restoration than a reminder of the town’s latent potential. Hong Kong prospers finest when it connects China and the world. However so long as Beijing’s affect continues to forged uncertainty over its enterprise surroundings, its full promise as a worldwide monetary hub is prone to stay unfulfilled.
