HKEX Defies the Odds: Why Volatility Isn’t Dampening Hong Kong’s IPO Surge

In a world roiled by geopolitical tensions and economic uncertainty, Hong Kong’s stock exchange (HKEX) is proving that capital markets can thrive precisely when they matter most. Despite fears of a slowdown due to U.S.-China trade disputes and rising interest rates, HKEX’s Q1 2025 results reveal a paradox: the more volatile the environment, the more companies are rushing to list in Hong Kong. With IPO fundraising hitting record levels and a bustling pipeline of applications, the question arises—what makes Hong Kong’s capital-raising ecosystem so resilient?

Ask Aime: Why are so many companies rushing to list in Hong Kong despite the volatile market?

The IPO Boom: Numbers That Defy the Narrative

HKEX’s Q1 2025 performance is nothing short of striking. Seventeen IPOs raised HK$18.7 billion, a 400% increase compared to the same period in 2024. Even more telling is the year-to-date (YTD) data: through February, IPOs had already secured HK$61.4 billion, a 255% surge over 2024. This growth isn’t just a numbers game; it reflects a diversification of sectors. Tech startups like DeepSeek, an AI firm valued at US$1 billion, share the spotlight with traditional industries such as mining and manufacturing.

The pipeline is equally robust. With 120 active applications as of March 2025—up from 84 at year-end 2024—the momentum suggests 2025 could be HKEX’s strongest year for listings since its 2019 IPO boom. Analysts now project HK$130–150 billion in total IPO funds for the year, driven by dual listings from Chinese A-share companies and international issuers.

The Resilience Engine: Why HKEX Is Thriving Amid Chaos

HKEX’s success isn’t accidental. It stems from a deliberate strategy to position itself as a “super-connector” in global finance, leveraging three key pillars:

1. The China Advantage:
   HKEX’s role as a gateway to China’s capital markets remains its cornerstone. Southbound Stock Connect trading volumes soared to HK$110 billion average daily turnover (ADT) in Q1 2025—a 255% jump from 2024—as mainland investors sought offshore exposure. This two-way flow of capital ensures liquidity even during global downturns.

2. Diversified Revenue Streams:
   While IPOs grab headlines, HKEX’s broader market health underpins its resilience. Derivatives trading hit an average daily volume (ADV) of 1.87 million contracts, up 24% year-on-year, while LME commodities volumes reached an 11-year high. These segments, combined with a 78% EBITDA margin (up 6 points from 2024), demonstrate operational efficiency and financial strength.

3. Innovation and Connectivity:
   HKEX isn’t resting on its laurels. The launch of the Hang Seng TECH Covered Call ETF, which tracks AI-driven Chinese tech firms, and upgrades to Bond Connect and Single Stock L&I Products, are expanding its product suite. Strategic partnerships, such as with Thailand’s Stock Exchange, are also broadening its reach into ASEAN and Middle Eastern markets.

Navigating Volatility: HKEX’s Playbook for Uncertain Times

HKEX CEO Bonnie Chan has framed the exchange’s success as a blend of adaptability and foresight. When asked about the risks of geopolitical instability, she highlighted regulatory clarity—such as resolving the UK FCA’s nickel market probe—and technological upgrades, like the LME’s LMEselect v10 platform, as critical to maintaining investor confidence.

The data backs this approach. Even as global markets wavered, HKEX’s trading turnover hit 16 days of over HK$300 billion, a record for the first quarter. This liquidity, paired with low fees and a reputation for stability, has made Hong Kong the preferred listing destination for firms seeking Asian exposure.

Conclusion: A Gateway to Asia’s Future

HKEX’s Q1 results underscore a fundamental truth: in turbulent times, markets that offer access to growth, diversified opportunities, and operational reliability will outperform. With IPO pipelines bulging, trading volumes at record levels, and a strategy that balances innovation with stability, HKEX is not just weathering volatility—it’s capitalizing on it.

The numbers tell the story: from HK$4.8 billion in IPO funds in Q1 2024 to HK$18.7 billion this year, and from 5 IPOs in early 2024 to 10 in the same period now, the trend is unmistakable. As Bonnie Chan put it, HKEX’s role as a “super-connector” isn’t just a slogan—it’s a blueprint for turning global uncertainty into opportunity. For investors, this resilience makes Hong Kong not just a market to watch, but a bet on Asia’s enduring growth story.