Reasons for the Comeback of the Hong Kong Stock Exchange
- Geopolitical tensions between the USA and China: The increasing conflicts are leading many Chinese companies to withdraw their listings from the USA or not to pursue them there at all. Instead, they prefer Hong Kong as a financial hub to minimize risks.
- Political pressure in the USA: Some US politicians are calling for the removal of Chinese companies from US exchanges due to alleged security risks and lack of transparency. This strengthens the trend towards returning to Hong Kong.
- Key industry players like CATL: Significant companies like battery manufacturer CATL are part of this movement. Despite challenges in margins, the lower development cost base offers opportunities for profitable growth.
Significance for Hong Kong and China
- The stock exchange increasingly serves as a bridge between international investors and the Chinese market, giving it a strategically important role.
- At the same time, Shanghai benefits as well: both cities plan a coordinated development of their financial centers to strengthen their international competitiveness.
Risks and Challenges
- Despite the boom, China is under significant economic pressure.
- Beijing’s increasing influence over companies in Hong Kong and the suppression of political opposition deter international investors.
This dynamic presents a mixed picture: on one hand, the influx of large IPOs from China sustainably revitalizes the financial hub of Hong Kong; on the other hand, political uncertainties remain a risk factor with global implications.
In summary, the comeback of the Hong Kong stock exchange, driven by more than 70 planned IPOs in 2025, is primarily propelled by geopolitical shifts. The return of significant Chinese corporations like CATL underscores China’s global ambition despite growing tensions with the West.
Sources:
Handelsblatt (2025): “Hong Kong’s Stock Exchange Experiences Its Comeback”