Has Hong Kong’s IPO boom hit a wall – or is a year-end rush still to come?

Hong Kong's initial public offering (IPO) momentum has slowed significantly in the fourth quarter due to market volatility and tighter regulatory scrutiny, but industry experts believe a year-end rush of listings could still help the city secure a top-three global ranking by 2026. Since October, only three new IPOs have launched, all of which debuted below their offer prices, and two other potential listings have been shelved.

As of last week, 17 companies with approved listing hearings have yet to go public, with some waiting up to four months after approval. However, six new companies began bookbuilding on Friday, aiming to raise up to HK$6 billion. Hong Kong's IPO market has faced challenges stemming from growing investor anxiety over mainland China's tax rules on overseas investment and a crackdown on IPO rigging and artificial demand.

Despite these issues, hard-tech firms still desire to list before year-end, even if they must accept lower valuations. Hong Kong is on track to have its busiest IPO year since 2020, with over 100 companies having listed by the end of September and raising HK$388 billion, marking a record nine-month fundraising period. However, many of these newly listed companies currently trade below their offer prices.

Experts predict that Hong Kong could still raise HK$100 billion in IPOs to meet its annual fundraising target of HK$480 billion by 2026.