Hong Kong’s Equity Market Revival Signals New Momentum Ahead of Potential Shein IPO

27 June 2025

Creator: Edgar Su | Credit: REUTERS

Hong Kong's equity capital markets have staged a compelling comeback in the first half of 2025, fueled by a noticeable rise in initial public offerings and secondary listings. This rebound, while still lagging behind historical highs, marks a critical turning point for a city that has been struggling to reclaim its once-dominant position in the global financial arena. The renewed activity has come as investors place cautious bets on a broader revival, with the highly anticipated initial public offering of fast-fashion juggernaut Shein looming in the background.

In the first six months of 2025, Hong Kong IPOs and secondary listings raised a combined $5.9 billion, according to data from Dealogic. That figure marks a 29 percent increase compared to the same period last year. It also breaks a nearly three-year slump that followed a series of macroeconomic and geopolitical disruptions that dented investor confidence in the region. While the overall sum still pales in comparison to the city’s heyday, the uptick suggests that momentum may be returning.

One of the primary contributors to this growth has been the shifting regulatory and economic landscape in mainland China. Beijing has adopted a more supportive tone toward private enterprises and overseas listings in recent months, which has helped reinvigorate Hong Kong’s appeal as a listing venue. According to capital market professionals, this shift has prompted a fresh wave of companies to consider Hong Kong for their fundraising efforts. For years, tighter regulations and ongoing US-China tensions discouraged many Chinese firms from pursuing offshore listings. Now, with Shein reportedly considering a dual listing in the city, confidence appears to be building again.

In parallel, a more stable interest rate outlook globally has added to the buoyancy in the markets. As expectations solidify that central banks, including the US Federal Reserve, may begin rate cuts in the coming quarters, investors are looking for undervalued opportunities in Asian equities. The improving liquidity environment combined with an easing of inflation concerns has further contributed to this newfound optimism.

Notably, while the number of deals in Hong Kong increased, the average deal size remained modest, signaling that the revival is still in its early stages. A few large offerings accounted for a significant portion of the total proceeds. Among them, property platform KE Holdings made headlines with a secondary listing that raised over $1 billion, becoming one of the most watched events of the year. Smaller but strategically significant listings from tech and healthcare companies also dotted the landscape, reflecting a growing appetite for innovation-driven businesses.

Still, challenges remain. Hong Kong’s equity capital market continues to compete with regional hubs like Singapore, which has gained traction among tech startups and sustainable finance players. Moreover, investor sentiment, while improving, remains fragile. Geopolitical tensions, particularly involving Taiwan and the South China Sea, could still sour the mood quickly. Additionally, scrutiny from international regulators, especially in the United States, remains a key factor influencing cross-border capital flows.

The spotlight now turns to Shein. The e-commerce giant, which commands a global following and is valued at over $60 billion, has been weighing its IPO options for several years. While initial plans focused on a US listing, persistent regulatory hurdles and political sensitivity have prompted the company to consider Hong Kong as a safer, more welcoming alternative. A successful Shein IPO could act as a beacon for other high-growth companies seeking capital while avoiding regulatory entanglements in Western markets.

Bankers and analysts believe that if Shein chooses Hong Kong, it could single-handedly reshape sentiment toward the city’s financial markets. Its brand power, scale, and consumer reach would not only attract institutional capital but also re-ignite interest from retail investors. In many ways, Shein’s decision could become the defining test of Hong Kong’s ability to reclaim its regional leadership in equity fundraising.

As of now, preparations are reportedly underway. Market insiders suggest that Shein could file its prospectus as early as the third quarter of 2025, with a listing possible before year-end. Should this timeline hold, the back half of the year may see a sharp spike in fundraising activity, pushing 2025’s total well past initial forecasts.

Despite the uncertainty that still shadows global capital markets, Hong Kong appears to be shaking off its recent lethargy. The cautious resurgence in deal-making, the softening of regulatory barriers, and the growing likelihood of a blockbuster Shein IPO all point to a potential reawakening of the city’s financial engine. Whether this revival becomes sustainable or fizzles out will depend on how well Hong Kong capitalizes on its current momentum and whether corporate giants like Shein ultimately commit to the city’s future.