Hong Kong is getting its financial mojo back

PORK AND sports drinks usually do not pair well—but they form a tasty combo on the Hong Kong Stock Exchange (HKEX). On February 3rd Eastroc Beverage, one of China’s largest makers of energy drinks, sold $1.3bn-worth of shares in a secondary listing there. That will be Hong Kong’s biggest equity transaction of the year—until February 6th, when Muyuan, the world’s top pork producer, is set to raise $1.4bn in a similar deal.

Not long ago the city was on a capital-market diet. Covid-19 lockdowns helped deter financial advisers and much of the Chinese business that once made Hong Kong Asia’s top financial hub. The market improved in 2025, when issuers sold over $80bn-worth of shares, more than the previous three years combined (see chart). Now Hong Kong’s lawyers and bankers are feasting. Last month equity sales increased more than five-fold compared with the same month a year ago, which was itself five times stronger than January 2024. Some 400 Chinese firms are seeking approval to sell shares.

Hong Kong’s dealmakers have Beijing to thank. Hong Kong, a Chinese territory, has its own legal system and securities watchdog. But the China Securities Regulatory Commission (CSRC), the mainland regulator, decides whether Chinese firms can sell shares on HKEX. The CSRC has been quicker to approve secondary listings like Eastroc’s and Muyuan’s, in which Chinese firms listed on mainland exchanges sell shares in Hong Kong. In 2026 these accounted for 24% of overall deal value.

The CSRC is also becoming less leery of mainland firms pursuing initial public offerings in Hong Kong. Last year 81 of them raised a combined $11.8bn in IPOs there, accounting for 15% of the capital raised on HKEX. Last month the regulator waved through the IPOs of two Chinese artificial-intelligence (AI) companies, MiniMax and Zhipu. (More than 40% of the equity raised in 2025 came through “follow-on” sales, in which a firm already listed in Hong Kong issues new shares and which do not require approval from the CSRC.)

This buffet of listings is coinciding with global investors’ growing appetite for Hong Kong shares. This diminished after America tightened rules on when American funds could invest in Chinese tech firms in the post-pandemic years. American firms did not want to be seen funding sensitive Chinese technology; Chinese ones worried that sudden American restrictions could provoke sell-offs. Such worries are slowly beginning to ease. American investors still do not rank among “cornerstone” investors in Chinese tech deals, notes a banker, but they are once again being allocated shares.

A few things could still sour the mood. Investment banks, most of them Western, laid off staff during the quiet years and are struggling to hire them back. Chinese ones have been rushing through deals and drafting listing documents that Hong Kong’s local watchdog, the Securities and Futures Commission (SFC), has found wanting. The SFC, too, is understaffed: employees responsible for reviewing listing documents are said to be juggling dozens of applications at a time. Bankers and lawyers reckon that a slowdown in approvals is almost guaranteed. They predict fewer small, unprofitable firms will be allowed to list in Hong Kong this year.

A bigger problem is Hong Kong’s growing reliance on approvals from Beijing. The CSRC has the usual mandates: protect retail investors and manage market liquidity. But it is also required to support the Communist Party’s policy objectives. In China it has sought to channel capital to fashionable industries (such as chipmaking and AI) while blocking those not favoured by central planners (like retail). Extending this approach to which Hong Kong listings get the nod could distort capital allocation.

The CSRC is also politically sensitive and intensely scandal-prone. When the regulator appointed a new boss to its international division last year, approvals for Hong Kong listings stalled for two months. The pause, which the CSRC made little effort to explain at first, almost stifled the listing recovery, says a Hong Kong-based lawyer. CSRC officials are regularly sacked for corruption. Internal investigations have already slowed down the processing of listing applications. More pork and pep drinks are one thing. Digesting Peking-flavoured politics is quite another. ■