Hong Kong tops global IPO charts for the first time since 2019 for total funds raised, overtaking New York’s stock exchanges

Global IPO markets raised $158.4 billion across 1,227 deals in 2025, an 18% increase year-on-year, with the Hong Kong Exchange leading at HKD272.1 billion ($34.3 billion), a 210% jump from 2024. Hong Kong's surge was driven by a record wave of A+H dual listings and a pipeline of over 300 active IPO applications (including 92 A+H applicants), concentrated in TMT (39%), healthcare/life sciences (21%) and industrials (18%); notable Hong Kong listings included CATL ($4.6bn), Pony AI ($860m) and Mixue ($444m). KPMG expects the IPO momentum and AI-related listings in Hong Kong to continue into 2026, while other exchanges—NYSE ($20.3bn), NASDAQ ($19.2bn), India ($18.5bn) and Shanghai ($13.2bn)—show mixed results.

Analysis

Market structure: Hong Kong/HKEX (0388.HK) is the primary winner as IPO fee income and market-making flow shift—HKEX raised HKD272.1bn vs ~US$20bn on major U.S. exchanges—giving it short-to-medium term pricing power and higher trading volumes. Direct beneficiaries include A+H listing candidates (tech, healthcare), global bookrunners, and custody/prime brokers; losers are marginal U.S. IPO venues and smaller domestic exchanges losing deal flow. Cross-asset effects include incremental CNH/HKD inflows (supporting onshore yield compression), elevated equity market liquidity, and higher implied vols in single-stock options around large IPOs.

Risk assessment: Key tail risks are a regulatory reversal on A+H approvals or tightened capital controls in China, U.S. geopolitical sanctions on dual-listing structures, or a tech-sector drawdown that re-prices newly listed names; probability materializes within 3–12 months. Immediate: higher headline volatility around blockbuster listings (days–weeks). Short (1–6 months): lock-up expiries and secondary supply could depress prices; long (6–24 months): sustained policy support could entrench HK as the dominant Asian IPO hub. Hidden dependency: continuation depends on mainland liquidity policy and Guangdong/HK capital flows—watch PBOC and CSRC communications closely.

Trade implications: Favor exchange and Hong Kong market infrastructure exposure, thematic long positions in AI/tech/healthcare Chinese equities, and hedges on U.S. exchange share loss. Use size discipline (1–3% per idea) with volatility-aware option overlays; expect 20–40% asymmetry if policy stays favorable but cut losses quickly on negative regulatory signals. Catalysts to monitor: top-5 A+H approvals, large listings (>$3bn) cadence, and monthly active IPO application counts crossing upward of 350.

Contrarian/risks: Consensus may underprice regulatory fragility—if >20% of the 300 active IPO apps withdraw in 60–90 days, expect a market re-rating in HK equities and sharp repricing of related brokerages. Historical parallel: 2018–2019 saw capital flow reversals after policy shocks; current optimism could be overdone if China re-prioritizes domestic market funding instead of international exits. Hedge with asymmetric option structures and size positions assuming a 12-month policy drift scenario.

Key Decisions for Investors

• Establish a 2–3% net long position in HKEX (0388.HK) or equivalent exposure via EWH (iShares MSCI Hong Kong ETF) within 4–8 weeks to capture IPO fee tailwinds; set a stop-loss at -12% and take-profit tranches at +25% and +50% over a 6–12 month horizon.
• Initiate a 1–2% hedge against U.S. exchange share loss by buying 6-month NDAQ 5% OTM puts sized to cap portfolio downside (or enter a 6-month put spread: buy 5% OTM put, sell 15% OTM put) to limit cost; reassess after major HK IPOs clear market (30–90 days).
• Allocate 1–2% to China tech/AI exposure via KWEB (KraneShares) or a basket of new A+H IPOs selectively (prefer companies with >$100m free float and credible revenue growth); scale in on pullbacks of 10–20% and target 12–18 month holding period.
• Run a relative-value pair: long EWH 2% vs short QQQ 1.5% (or short NDAQ 1–1.5%) to express regional market-share rotation; rebalance monthly, cut both legs if HK monthly active IPO applications fall >20% quarter-over-quarter or if PBOC/CSRC issues restrictive guidance within 60 days.