Hong Kong IPO Market Sees Shift in Share Allocations
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Hong Kong IPO Market Sees Shift in Share Allocations
- Hong Kong's IPO market has seen a significant increase in activity, with HK$209.9 billion raised across 85 new listings in the first half of 2026, marking the strongest first-half performance in five years.
- Companies are increasingly allocating shares to strategic investors, business partners, and close allies, sometimes referred to as "friends and family," a shift noted by Vikas Pershad, an Asia equities portfolio manager at M&G Investments.
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Hong Kong’s initial public offering (IPO) market is experiencing a boom, leading to a change in how shares are allocated in popular deals. The market recorded HK$209.9 billion from 85 new listings in the first half of 2026, representing a 92% increase in funds raised compared to the same period in 2025. This strong performance has made demand for new shares fierce, with new listings in 2026 delivering an average first-day gain of almost 30%. Some reports indicate an even higher average first-day return of 61% for new listings in the first half of 2026.
In this competitive environment, companies are increasingly taking a direct role in deciding who receives IPO allocations. This often means prioritizing strategic investors, business partners, and other close allies, a practice sometimes informally called “friends and family” allocations. This approach contrasts with past practices where investment firms primarily competed with each other and relied on relationships with banks to secure allocations. Vikas Pershad, an Asia equities portfolio manager at M&G Investments, has observed this shift, noting that management teams are now directly involved in choosing their investors.
The Hong Kong IPO market is forecast to remain robust throughout 2026, with projections suggesting the city could raise HK$320 billion, potentially making it the world’s second-largest listing venue after Nasdaq. This growth is largely fueled by Chinese technology firms, particularly those in the artificial intelligence supply chain, seeking offshore capital. As of June 26, 2026, there were over 500 active IPO applicants, with 443 publicly filed applications, a 52% increase since the start of the year.