Hong Kong IPOs Rank First Globally in Fundraising, but Post-Listing Performance Remains Under Pressure
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Hong Kong led the world in IPO fundraising last year, yet roughly half of its 179 new listings in 2025 have fallen over the past three months — underperforming both the Hang Seng and the global IPO benchmark, as Stock Connect inclusion becomes an arbitrage exit window.
Global fundraising champion — so why are the new stocks lagging?
Since January 2025, Hong Kong has seen 179 new listings; about half saw share prices fall over the past three months.
Over the same period the Hang Seng dipped only slightly, while the FTSE Renaissance Global IPO Index rose more than 10%.
This means → Hong Kong's new stocks are trailing both benchmarks, exposing a clear gap between fundraising scale and post-listing returns.
Stock Connect inclusion — why does it act as a sell signal?
On March 9 this year, 33 Hong Kong stocks entered Stock Connect. More than half had doubled from their IPO price by the last trading day before inclusion; eight had gained over 300%.
All eight of those stocks subsequently fell more than 10%.
In plain terms = Stock Connect inclusion — the channel that lets mainland investors buy Hong Kong shares via Shanghai or Shenzhen — should be bullish. Instead it has become an exit ramp: prices get pushed up before inclusion, then money leaves once the gate opens.
What is the arbitrage logic?
Harvest Asset Management strategist Ding Wenjie noted that some Hong Kong funds treat Stock Connect inclusion as a vehicle for extracting extra returns.
Gavekal portfolio manager Leonid Mironov added a second layer: many H-shares also trade as A-shares on the mainland, and once an H-share enters Connect, capital tends to rotate back into the cheaper A-share.
This means → pre-inclusion price gains largely reflect short-term arbitrage positioning, not fundamental improvement. Once inclusion is done, the H-share loses its bid.
Will supply keep expanding?
Goldman Sachs forecasts Hong Kong IPO fundraising will reach roughly $60 billion in 2026 — nearly double the $36 billion raised in 2025.
More than 600 companies are currently queued for a Hong Kong listing.
Goldman last Wednesday downgraded H-shares, pivoting to favor mainland A-shares on the basis of greater AI-hardware exposure.
What are regulators and markets watching next?
China's *Securities Times* issued a warning on May 29 about Hong Kong IPOs that spike then crash, signaling regulatory attention to the pattern.
Benjamin Cavender, managing director at China Market Research Group, said low fees, limited fundraising capacity, and rising competition are pushing some market participants toward shorter-term behavior.
The next live test: AI firm Zhipu AI is expected to begin trading via Stock Connect in Shanghai this Monday; MiniMax is expected to follow later this summer — both listed in Hong Kong in January. Their post-inclusion trajectories will directly test whether the arbitrage pattern holds.
Content is for reference only, not financial advice.