Those who wrote off the Hong Kong stock market have been left to eat their own words as it left rival indexes trailing and regained its global IPO crown
Who would have thought 2025 would be such an auspicious year for Hong Kong Exchanges and Clearing (HKEX) to celebrate its silver jubilee. The city has been tangled up in the worsening trade and tech war between China and the United States. Until last year, many if not most international fund managers had written off Chinese equities as “uninvestible”, as the Hang Seng Index almost fell to its lowest since Covid-19 struck.
But, as if out of the blue, Asia’s third-largest stock market roared back, having vastly outperformed the S&P 500 so far this year. And, as a nice anniversary present, it has recovered its global initial public offering (IPO) crown. Operator HKEX will be celebrating 25 years as a listed company next month, even though it can trace its roots to 1891.
In the past two decades, the size and services of HKEX have grown leaps and bounds. Its market cap has jumped to over HK$500 billion from HK$8.6 billion. To integrate cross-border financial markets, diversify options for investors and promote yuan internationalisation, the Stock Connect was introduced in 2014, followed by the Bond Connect in 2017. The most recent, Swap Connect, was launched in 2023 to enable outside investors to trade and clear onshore renminbi interest rate swaps through the so-called northbound channel.
