HKEX's Surge in October Daily Turnover: A Signal of Institutional Re-entry?

The Hong Kong Stock Exchange (HKEX) has long been a barometer of Asia-Pacific market dynamics, and its October 2025 performance has sparked renewed interest among investors. With daily turnover figures surging and institutional activity hinting at a potential re-entry, the question looms: Is HKEX witnessing a structural shift in liquidity and sentiment?

Liquidity Trends: A Global Benchmark

According to HKEX data, the city's ETF market liquidity ranked third globally as of September 2025, with an average daily turnover of nearly HKD 38 billion. This figure underscores HKEX's growing role as a liquidity hub, particularly in the virtual asset ETP (exchange-traded product) segment, where assets under management (AUM) reached HKD 8.1 billion by year-end September. The exchange's plans to digitize the subscription and redemption mechanism for ETPs further signal a strategic push to attract institutional capital, which often prioritizes efficiency and transparency.

Investor Sentiment: High-Profile Listings as Confidence Barometers

While October 2025 institutional flow data remains sparse, recent high-profile listings offer critical insights. SANY Heavy Industry's US$1.72 billion HKEX IPO in October 2025 attracted 23 cornerstone investors contributing over US$700 million, according to Linklaters. This level of participation, particularly from long-term institutional stakeholders, reflects a broader appetite for quality assets in the region. Such cornerstone investments are often seen as a hedge against market volatility, suggesting that institutional players are recalibrating their risk profiles amid global macroeconomic uncertainty.

Moreover, the robust subscription rates for SANY's IPO highlight the perceived value of industrial and infrastructure equities-a sector traditionally favored by institutional portfolios. As noted by legal advisors Linklaters, the deal's success underscores HKEX's appeal as a platform for accessing Asia's high-growth industries.

The Missing Link: October Institutional Flows

Despite these positive indicators, direct evidence of institutional re-entry in October 2025 is limited. Available records, such as a MarketScreener report showing Standard Chartered's share repurchase on October 28, reflect corporate capital management strategies rather than broad institutional inflows (MarketScreener report). However, the absence of negative data-such as outflows or reduced participation-suggests that the market is at least stabilizing.

This ambiguity is compounded by the fact that institutional investors often operate with lagged signals. For instance, the digitization of ETP mechanisms announced by HKEX in September may take months to fully materialize in trading patterns. Thus, October's turnover surge could be an early indicator of a longer-term trend rather than a definitive reversal.

Implications for Investors

For retail and institutional investors alike, HKEX's October performance presents a dual narrative. On one hand, the exchange's liquidity enhancements and digital innovation position it as a competitive alternative to traditional Western markets. On the other, the reliance on high-profile listings to drive sentiment highlights the need for sustained structural reforms.

Investors should monitor two key metrics in the coming months: (1) the adoption rate of HKEX's digitized ETP mechanisms and (2) the frequency of cornerstone investments in upcoming IPOs. A sustained increase in either would strongly signal institutional re-entry.

Conclusion

While October 2025 data does not yet provide a complete picture, the confluence of improved liquidity, strategic digitization, and high-profile institutional backing suggests that HKEX is on the cusp of a renaissance. For now, the surge in daily turnover and the SANY IPO serve as compelling evidence that the market is regaining its allure-a trend that could redefine Asia-Pacific capital flows in the year ahead.