Hong Kong equities seen on steady track

The Hong Kong equity market has demonstrated notable resilience in recent quarters, with average daily turnover for the first eight months of 2025 surging to HK$248.3 billion ($32 billion), a 132 percent increase compared with the same period last year.

Experts remain upbeat about the market's prospects and have forecast continued upward momentum, as more companies seek Hong Kong listings to enhance their global growth exposure.

Data from Hong Kong Exchanges and Clearing showed that market capitalization at the end of August jumped 47 percent year-on-year to HK$46.6 trillion. In the first eight months, 59 initial public offerings debuted in the city, raising HK$134.5 billion, a 579 percent increase over the same period last year.

The robust performances have prompted investment banks to revise their outlook.

Last week, multinational banking services provider Citi adjusted its year-end target for the benchmark Hang Seng Index by 7 percent — from 25,000 to 26,800 points — while projecting 27,500 for the end of June 2026 and 28,800 for December the same year.

Hongkong and Shanghai Banking Corp also upgraded its year-end target for the HSI to 27,010.

Mofiz Chan, chairman of the Hong Kong Securities and Futures Professionals Association, said the upward adjustments reflect expectations of a continuing economic recovery, improved corporate earnings and returning capital flows.

China's attractiveness remains a key driver behind the Hong Kong Special Administrative Region's buoyant market, as a significant amount of overseas capital, including funds from the Middle East and Europe, has flowed into the SAR for investment in Chinese mainland companies, he added.

Several new IPOs in the city have drawn substantial capital from overseas cornerstone investors, particularly those from the Middle East.

For example, Contemporary Amperex Technology Co, a Chinese mainland manufacturer of electric vehicle batteries and energy storage systems, which launched its IPO in May, secured investment from Kuwait Investment Authority, a sovereign wealth fund based in Kuwait City, the capital of Kuwait.

Christopher Ma Pak-chi, partner in corporate and commercial practice at global law firm Simmons &Simmons, highlighted Hong Kong's role as a leading international financial center, describing it as "attractive" for many Middle Eastern institutions seeking to expand their presence in Asia.

"Hong Kong's established and robust financial ecosystem, coupled with its strategic location as a gateway to the Chinese mainland as well as Southeast Asia, makes it an attractive destination," Ma said.

Speaking at a seminar last week, Hong Kong Financial Secretary Paul Chan Mo-po emphasized the city's comprehensive financing ecosystem, which supports enterprises at every stage of development.

"Whether it is angel investment, venture capital, private equity, securities or bank loans, Hong Kong can connect global capital with enterprises, supporting their growth on all fronts and at all levels," Chan said.

Hong Kong stocks surged on Wednesday, with the benchmark HSI adding nearly 470 points to close at 26,908.39.