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Hong Kong IPOs and second listings raise $12.8 billion in

H1

-LSEG data

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Hang Seng Index up 21.2% year-to-date despite US-China

tariff

talks

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Standalone IPOs in Hong Kong may resume next year, bankers

say

By Scott Murdoch

June 27 (Reuters) - Hong Kong's equity capital markets

activity roared back to life in the first half of 2025, driven

by global investors sharpening focus on China as the city awaits

the possible Shein initial public offering in the second half.

Big ticket capital raisings and a rush of "A to H" share

deals, where companies already listed on mainland Chinese

markets list in Hong Kong, helped revive flatlining markets and

led to the strongest first half since 2021.

Fast fashion giant Shein is working to list in Hong Kong

before the end of the year, Reuters reported in May, citing

sources with direct knowledge of the matter.

A Shein listing would help Hong Kong re-establish its

credibility as a global fundraising centre as a time of major

volatility created by U.S. trade policy changes.

Hong Kong's Hang Seng Index is up 21.2% year-to-date,

making it one of the best performing major markets in the world,

despite the tariff negotiations between China and the United

States.

"The new era has come which is a more divided world - I

think that's reality we are facing," said James Wang, head of

Asia ex-Japan equity capital markets at Goldman Sachs ( GS ).

"Arguably, there are more investment opportunities. It's a

structural change and there is going to be capital outflowing

from the U.S. and inflows into the Asian region."

Across Asia, including Japan, there was a 15.3% increase in

total equity issuance in the first half to $116.2 billion, up

from $100.7 billion in the same period last year, according to

LSEG data.

There were $12.8 billion of combined proceeds from IPOs and

second listings in Hong Kong in the first half, up more than

eight-fold on the same time last year, the data showed.

But the $2.9 billion raised from IPOs in Hong Kong during

the half, while up from last year's $1.7 billion, remained well

below the $8.5 billion raised on the Nasdaq in New York,

according to LSEG data.

Despite the Hang Seng's rally, investors remain nervous

buying into IPOs as volatility continues to rack global markets.

"An A to H listing is like a follow on, there is a price

benchmark, but for standalone IPOs where you don't have that

price benchmark," Wang said.

"The last round's valuation is not a benchmark. For people

to feel comfortable to write a large ticket they need to get

comfortable the market is there to support them, not just that

they feel the valuation is OK."

Global investors buying back into China and participating in

major deals like battery maker CATL's $5.3 billion

listing and electric vehicle makers Xiaomi ( XIACF ) and BYD

raising a combined $11 billion helped drive equity

transactions, dealmakers said.

"Many global investors have reduced underweight positions

and are taking advantage of capital market liquidity events to

increase exposure," said Sunil Dhupelia, JPMorgan's ( JPM ) co-head of

equity capital markets for Asia-Pacific.

"Engagement from global investors on our Hong Kong and

mainland China pipeline is the highest it has been for some

time," he said.

China in May cut benchmark lending rates for the first time

since October as authorities worked to ease monetary policy to

shield the economy from any Sino-U.S. trade war impact.

China's Premier Li Qiang said on Thursday the world's

second-largest economy remains the biggest driving force for the

global economy and that policymakers would take "forceful steps"

to boost domestic consumption.

"I think investors are also taking some comfort that China

still has chips in their bag that they can play to support the

market, such as supportive policy measures," said Aaron Oh,

UBS's head of equity capital markets for Asia Pacific.

"And China has shown resiliency thus far despite the global

trade uncertainties."

Goldman Sachs ( GS ) topped Asia's equity capital market

league tables in the first half, ahead of Morgan Stanley ( MS )

and JPMorgan ( JPM ), the LSEG data showed.