Hong Kong IPO boom at risk as cornerstone backers get cold feet, sources say

Hong Kong's booming initial public offering (IPO) market is facing uncertainty as cornerstone investors start to reconsider their subscriptions. Cornerstone investors, who typically receive guaranteed allocations in exchange for holding shares for six months, are now questioning whether to subscribe to upcoming deals. This shift in investor sentiment has forced some issuers to postpone their listings, with at least one IPO originally planned for October delayed until the following month.

Over the past nine months, 60% of new listings have traded below their issue prices, causing long-term investor confidence to wane, especially amid ongoing market volatility. While funds raised through Hong Kong IPOs reached a record US$48.4 billion in the first nine months of 2026, more than 60% of companies listed in the third quarter fell below their offer prices.

Institutional investors such as sovereign wealth funds and private equity firms have recorded paper losses, with some even reducing their investment sizes or seeking internal approval from their investment committees. Despite this downturn, Hong Kong's IPO market continues to attract international cornerstone investors, including firms from the Middle East, Europe, North America, and Asia-Pacific.

However, the number of these investors remains cautious, potentially affecting the overall success of future listings.