AI frenzy drives Hong Kong share sales to record US$47.5 billion in Q3 despite stock sell-off

The AI-driven frenzy in Hong Kong led to record share sales worth US$47.5 billion in Q3, surpassing the previous high set in 2021. The surge was driven by Chinese companies seeking funds for expansion in the rapidly growing AI industry. Alibaba Group Holding's US$10.2 billion follow-on offering and Zhongji Innolight's nearly US$8 billion listing were among the notable transactions.

AI model makers Z.AI and MiniMax Group, as well as chipmakers Shanghai Iluvatar CoreX Semiconductor and Shanghai Biren Technology, all returned to the market shortly after their IPO lockups expired. The AI boom extended beyond Hong Kong, with share sales topping US$120 billion in the Asia-Pacific region in Q3, the most in six years.

Mainland China saw significant deals, including CXMT's 66.6 billion yuan IPO, the country's second-largest ever. India's IPO market also rebounded, raising US$26 billion since July, with notable transactions like Life Insurance's US$3.2 billion sell-down and the National Stock Exchange of India's US$2.4 billion IPO. Despite concerns about AI's potential returns and rising bond yields, there remains a substantial pipeline of deals, including Mynt's upcoming IPO in the Philippines and Firmus Grid's US$5 billion IPO in Australia.

Goldman Sachs expects investors to become more selective in the coming months, but the supply of deals is still substantial.