A blistering recovery in Hong Kong’s initial public offering (IPO) market this year has delivered a bonanza for investors, with returns above 30 per cent bucking a sluggish economy and languid property market.
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Holding new shares from the 34 companies that have pulled off offerings in 2025 would generate an average return of 34 per cent, according to Bloomberg data. Even selling the stocks upon their debuts would have fetched a 10 per cent gain, the data showed.
The eye-popping returns have coaxed institutional investors back to Asia’s third-largest stock market after years of retreat. Local individual investors have also shifted from the moribund property market – plagued by high borrowing costs and a supply glut – to the IPO market, where they are taking advantage of financial leverage to maximise their chances of winning share lotteries.
Mark Yue, a 36-year-old fintech worker, is one of thousands caught up in the frenzy. He is subscribing to popular, high-capitalisation IPOs, usually funded by margin financing equivalent to 10 times the principal. Since February, he has won shares in six out of the seven IPOs he took part in, including Contemporary Amperex Technology (CATL) and Mixue Group.
“The risk isn’t too high if you pick up popular names with margin financing,” said Yue, who sells the shares on the first day of trading in anticipation of an average 10 per cent return.
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Few asset classes globally can match Hong Kong IPOs this year. Gold has jumped 28 per cent on a global flight to haven assets, while the S&P 500 has risen less than 2 per cent after recovering from President Donald Trump’s “Liberation Day” sell-offs. The Hang Seng Index has advanced 18 per cent, but most of the gains came early in the year after DeepSeek’s abrupt ascent, and momentum has slowed recently.