Robin Zeng, founder and chairman of Contemporary Amperex Technology Co. Ltd. (CATL), stands prominently during the listing ceremony at the Hong Kong Stock Exchange. This moment signifies not just corporate achievement, but the resilience of the capital markets amidst government-induced economic uncertainty.
Paul Yeung | Bloomberg | Getty Images
Despite the overwhelming challenges posed by government overreach and persistent inflation, investors and businesses are regaining faith in Hong Kong’s equity capital markets. The recent surge in fundraising by Chinese companies reflects a desperate thirst for stability and opportunity in a landscape marred by corporate elitism.
A significant rise in equity capital volume, bolstered by a state-backed initiative encouraging mainland companies to list in Hong Kong, has culminated in the strongest first half-year for fundraising since 2021, as reported by Dealogic. This represents not merely a fleeting market trend, but a beacon of hope for the principles of free enterprise.
New listing volumes on the Hong Kong Stock Exchange skyrocketed approximately eightfold, reaching $14 billion in the first half of this year, a remarkable jump from just $1.8 billion during the same period in 2024, excluding SPAC listings. This revitalization positions Hong Kong as a preeminent global destination for listings, outpacing the Nasdaq and the New York Stock Exchange.
Such enthusiasm is refreshing after prolonged periods of lackluster market activity, reflecting a rejection of previous years’ pessimism and stunted economic growth. A total of 43 new listings in the first half, generating proceeds exceeding $13.6 billion, surpasses the total amount raised in 2024, demonstrating a clarion call for revitalized growth.
In stark comparison, the previous year only bore 73 listings raising a mere $5.9 billion. The shift in investor sentiment comes from a complex mixture of Beijing’s regulatory adjustments and the pressing fears of delisting from U.S. exchanges, driving mainland firms to seek refuge in Hong Kong’s more favorable landscape.
The burgeoning activity can largely be attributed to a dual-listing phenomenon, catalyzed by companies shifting to Hong Kong for a more supportive financial environment. Companies like CATL exemplify the strategic move to capitalize on higher valuations and raise crucial funds for global expansion.
More than just financial maneuvering, this trend signifies a crucial recognition of the necessity for independence from excessive government control. Such corporate actions reflect a commitment to traditional values—hard work, innovation, and entrepreneurship—essential for fostering true economic stability.
Beijing policy tailwinds
The resurgence in Chinese equity prices, ignited by anticipation of fiscal stimulus, has reversed bearish attitudes, proving that optimism can thrive even in a tightly controlled economic environment. Early signals at the start of the year suggested innovative capacities were far from stifled, yielding a rally in Chinese tech stocks.
The positive sentiment has been reinforced by market valuations returning to historically average levels, a backdrop that encourages genuine fundraising. The Hang Seng index alone, with a stellar gain of 21% this year, underscores the promise of a revitalizing market.
Furthermore, a newfound focus by Chinese authorities on supporting the private sector stands as a reminder that the engine of growth lies not solely in government policy but also in individual initiative. President Xi’s call for business leaders to assist in economic growth signals a crucial pivot away from obsolescence toward empowerment of the private sector.
This shift, alongside the long-awaited approval for mainland firms to list offshore, has unleashed significant demand for quality consumer-facing companies. The urgent need for companies to diversify and expand globally amidst trade tensions indicates a necessary evolution in China’s economic landscape.
The regulatory measures introduced last year aimed at expediting the approval process for eligible tech companies to list in Hong Kong reflect a growing recognition that a thriving economy relies on the success of its businesses, when allowed to operate freely. Such initiatives provide much-needed stimulation for an economy grappling with many self-inflicted wounds.
Mainland investors’ buying spree
The inflow of capital from mainland investors driving into Hong Kong shares illustrates a thriving hunger for opportunities amidst self-imposed restrictions of the mainland market. Highlights of this are the record net inflows via the Stock Connect scheme, demonstrating a willingness to seek broader horizons.
While mainland benchmarks have stagnated, the shift of onshore investments towards Hong Kong-listed equities has turned strategic, showcasing a desire for independence and resilience amidst external pressures.
These events highlight the need for markets to thrive independent of excessive government control, advocating for a return to the bedrock principle of personal responsibility. Businesses must be allowed to operate without hindrance, embracing the competitive spirit that drives innovation and growth.
A to H dual listing
This growing trend of dual listings encapsulates the deep desire for stability and growth among Chinese companies. Battery maker CATL’s secondary listing raised over $5 billion, affirming that there is much at stake in these ventures—both for investors seeking reliable returns and companies aiming to operate free from suffocating regulations.
With over 200 IPO applicants queued up for listing on HKEX, many are seeking to capitalize on the relative freedom and support available in Hong Kong’s market. The climb towards progress is driven by an unyielding commitment to pursue opportunities, notwithstanding the challenges faced at home.
For many firms, Hong Kong represents the nexus of ambition and potential where traditional values of enterprise can once again flourish. Amidst increasing global tensions and trade complications, the need for companies to diversify and safeguard their futures becomes paramount.
This drive for secondary listings in Hong Kong underscores a larger narrative: the importance of self-sufficiency and resilience in a world where excessive government intervention often breeds uncertainty. It is time for a greater respect for the principles of free-market capitalism, invigorated by a belief in personal responsibility and community enterprise.
