Move Over Wall Street: Hong Kong Leads World for Listings So Far This Year

Hong Kong’s capital markets, on life support this time last year, have staged a dramatic recovery, resulting in the territory leading the world for listing activity in the first half of the year.

In all, 42 companies went public in Hong Kong for the first half, raising the equivalent of $13.52 billion. That sees the Hong Kong Stock Exchange top the rankings for initial public offerings for the first time since 2019.

Nasdaq ranks second, with $8.85 billion raised in the first half of the year, according to data from the London Stock Exchange Group. The New York Stock Exchange is third globally with $7.52 billion raised.

Pace Set to Sustain

With the fast-fashion retailer Shein now looking to list in Hong Kong, having explored New York and London listings, the increased Hong Kong IPO activity looks set to continue in the second half of the year.

For Hong Kong, it is the best six months since the first half of 2021. Hong Kong stocks are also up 22.7% year to date, the second-best showing in Asia behind only the 28.8% gain in South Korean equities, a Seoul surge I discussed in my last column.

Companies shelved plans to go public in Hong Kong as a post-pandemic crash played into an increase in Sino-U.S. tensions, causing the Hong Kong stock market to lose half its value. The benchmark Hang Seng index entered last year at levels similar to those at the start of this century.

Stock-Market Surge

For Hong Kong, the stock-market recovery started last September when the Hang Seng shot higher on the promise of both fiscal and monetary spending by Beijing. That sparked a 35.0% advance between Sept. 11 and Oct. 7 last year.

This year, investors have shaken off the 14.5% plunge caused by the tariff shock in early April. Despite persistent U.S.-China tensions, markets are indicating some kind of trade framework is likely that would bridge the differences between the world’s two largest economies.

As a result, Hong Kong’s Hang Seng stands at 24,072, just 2.8% off its recent high close of 24,771 set on March 19. Today is a holiday in Hong Kong, the anniversary of the territory’s handover from Britain to China.

The resurgence in the stock market has resulted in the rapid ramp up of listing activity in Hong Kong.

CATL Leads the List

The biggest listing came in May, with the Hong Kong debut of Contemporary Amperex Technology (HK:3750), or CATL. The world’s largest maker of lithium-ion batteries raised the equivalent of $5.24 billion in a Hong Kong initial public offering, a debut I wrote about in May.

I asked at the time whether U.S. investors were missing out on the “biggest company you’ve never heard of,” since the structure shut off U.S. investors from directly accessing the IPO. CATL is a major supplier of batteries for electric vehicles.

Mainland Chinese companies and Chinese tech plays in particular have led the stock-market gains in Hong Kong. Although Chinese companies command higher multiples on the mainland exchanges in Shanghai and Shenzhen, it is far harder for international investors to access those stocks. So global investors normally get their China exposure in Hong Kong.

Mainland markets have dawdled this year by comparison. The CSI 300 index of the largest listings in large-cap Shanghai and tech-focused Shenzhen is up just 3.2% so far in 2025.

Hong Kong and Chinese companies are also looking to list in Hong Kong either as the primary listing or with a joint primary listing in New York, to ward off any potential political difficulties. China hawks in the U.S. Congress are pushing for Wall Street to limit Chinese access to U.S. capital markets, with some U.S politicians favoring the full delisting of all Chinese companies.

Such geopolitical tension is felt less in Hong Kong. The House Select Committee on China wrote to investment banks JP Morgan Chase JPM and Bank of America BAC, requesting they withdraw from the CATL listing in Hong Kong, but they went ahead as joint sponsors alongside two Chinese brokerages. Goldman Sachs GS and Morgan Stanley MS also took part as bookrunners.

Geopolitical Cross-Currents

Still, no Chinese company wants to see a repeat of the fiasco surrounding the listing of ride-hailing app operator DiDi Global DIDIY. It went public in June 2021, but fell afoul of Chinese regulators, who ordered the removal of DiDi’s app from Chinese app stores in response, as I wrote about at the time. The stock plummeted and was ultimately delisted from the New York Stock Exchange. Now listed over-the-counter, DiDi has been exploring listing in Hong Kong.

The fast-fashion app Shein (pronounced “She In”) is looking to learn from those lessons. It first filed in 2023 for a U.S. stock debut as I explored then, but by this time last year had ditched those plans to look at a London listing.

But Chinese regulators balked at both a U.S. and a U.K. stock offering. Now Reuters reports Shein is prepping a Hong Kong IPO, although it may take the unusual step of filing the initial paperwork confidentially, which would require a waiver. Given its previous political challenges, though, the company may want to keep the process under wraps until it has passed a Hong Kong Stock Exchange review – and satisfied Chinese regulators, too.

Shein has shifted its headquarters to Singapore, and doesn’t own its own factories in China. But it uses a network of some 7,000 suppliers in China, which Chinese regulators consider sufficient substance for it to come under their control.

The company, valued at the equivalent of $66 billion in 2023, is battling with changes to U.S. shipment rules that have hiked duties on its parcels. Shein and rival Temu are working out how best to adapt their operations, which previously saw them ship parcels duty free direct to customers. The companies are adapting by shipping in bulk to the United States via container ship, but still face higher costs and are also focusing their marketing spend on Europe.

At the time of publication, Alex Frew McMillan had no position in any security mentioned.