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2026 IPO bonanza! Over 90% of new stocks rose on their debut!
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joined discussion · Apr 2 15:59

In-depth Review of Hong Kong Stocks Q1 2026: Capital Shifts Amid Geopolitical Risks

In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025. Active trading masks index weakness, with risk aversion dominating HALO transactions In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty. The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -...
In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025.
Active trading masks index weakness, with risk aversion dominating HALO transactions
In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty.
In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025. Active trading masks index weakness, with risk aversion dominating HALO transactions In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty. The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -...
The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -3.58%. In contrast, the Hang Seng Tech Index (HSTECH.HK) plummeted by 15.70%, not only significantly underperforming the Hang Seng Index but also lagging far behind the Nasdaq Index, which fell by -7.11%.
In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025. Active trading masks index weakness, with risk aversion dominating HALO transactions In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty. The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -...
This may be primarily due to the current market's dominant logic shifting towards the HALO (Heavy assets, low obsolescence) trading strategy, which involves buying companies less affected by AI, such as those in heavy assets, logistics, and energy sectors, while abandoning overvalued AI and technology stocks. Against the backdrop of rising global geopolitical risks (e.g., Middle East tensions), fluctuating expectations for Fed rate cuts, Trump’s comments influencing capital flows, and tariff concerns, funds have rapidly exited high-valuation, high-volatility technology growth stocks and flowed into low-valuation, high-dividend defensive blue chips.
Southbound funds 'shift from offense to defense,' recording net outflows in April
As a key driver of Hong Kong stock pricing over the past two years, the behavior pattern of southbound funds underwent subtle changes in Q1 2026. Wind data shows that the scale of net purchases by southbound funds has significantly contracted. The monthly net inflows in the first three months of 2026 were all below HKD 100 billion, compared with more than HKD 150 billion during the same period last year. On April 1, southbound funds recorded net outflows of HKD 12.694 billion, occurring against the backdrop of a major global stock market rebound, potentially indicating mainland funds are using the rally window to take profits or adjust positions, possibly signaling short-term caution about the stock market outlook.
In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025. Active trading masks index weakness, with risk aversion dominating HALO transactions In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty. The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -...
Primary Market: IPO financing surpasses refinancing
In sharp contrast to the cautious secondary market, the Hong Kong IPO market saw a 'highlight moment' in Q1 2026, with total proceeds from initial public offerings exceeding HKD 109.9 billion, surging nearly fivefold year-on-year.
Historical data shows that in recent years, the scale of refinancing (post-listing financing) in the Hong Kong stock market has generally been higher than or equal to that of new listings. However, the heated new share market since Q2 2025 reversed this trend, as shown in the chart below.
In the first quarter of 2026, global capital markets fluctuated repeatedly amid unclear geopolitical and economic prospects. As a key market connecting mainland China and global capital, Hong Kong stocks showed a contradictory performance this quarter that is worth examining: on one hand, trading remained highly active, with average daily turnover staying at historical highs; on the other hand, there was a significant shift in capital flows and risk appetite, as the pace of 'buying sprees' by southbound funds suddenly slowed, the luster of technology stocks faded, while the new stock market continued the prosperity seen in the second half of 2025. Active trading masks index weakness, with risk aversion dominating HALO transactions In Q1 2026, the Hong Kong stock market presented a deceptive kind of 'prosperity': from a liquidity perspective, market activity remained high, with average daily turnover consistently surpassing the HKD 200 billion mark: in January, the average daily turnover was HKD 210.89 billion, in February during the Lunar New Year it was HKD 187.33 billion, and in March it further increased to HKD 226.219 billion, as shown in the chart below, indicating that market trading enthusiasm had not waned. However, this high liquidity did not translate into broad-based index gains but instead reflected defensive sentiment amid uncertainty. The broader market trend showed significant defensive characteristics. The Hang Seng Index (HSI.HK), as the bastion of blue-chip stocks, fell by 3.29% in Q1. Although it recorded negative returns, its performance was notably better than the technology growth sector and slightly outperformed the Dow Jones Industrial Average (DJI.US) of US blue-chip indices, which declined by approximately -...
This wave of IPO fever exhibits strong structural characteristics:
Continuing A+H share listing trend: Industry leaders like Muyuan Shares (02714.HK) and Dongpeng Beverage (09980.HK) went public in Hong Kong, raising over HKD 10 billion individually, demonstrating recognition of the Hong Kong platform by quality mainland assets.
Hard tech comeback: Benefiting from optimized Chapter 18C rules, $KNOWLEDGE ATLAS (02513.HK)$ 、 $MINIMAX-W (00100.HK)$ AI unicorns and others $HUAYAN ROBOTICS (01021.HK)$ 、 $GALAXIS TECH (02729.HK)$ Companies like BR Technology (06082.HK) have successfully listed, and their post-listing performance has been robust, with some even doubling.
However, behind the prosperity lie concerns, showing a 'polarization.' On one hand, chip stocks and large model stocks favored by the market have performed remarkably, while on the other hand, some traditional consumer goods and medical stocks lacking compelling narratives face under-subscription or even failed issuances (such as Tongrentang Healthcare postponing its IPO).
The global new stock 'capital drain' effect is approaching: The massive waves of SpaceX and OpenAI
It is worth noting that this year, the global primary market will welcome giant listings that may fundamentally alter the capital distribution landscape.
SpaceX has recently confidentially filed for an IPO, with the market expecting its valuation at listing to reach up to $1.75 trillion, raising approximately $500 billion, equivalent to nearly HKD 4 trillion—higher than the total IPO financing scale of the Hong Kong stock market in the 12 months ending March 2026.
Additionally, OpenAI has just completed another round of financing, raising $122 billion, close to a trillion Hong Kong dollars, and is highly likely to complete its IPO in 2026, with a similarly significant financing scale expected.
The scale of these 'giants' could trigger tidal movements of global speculative capital: Global sovereign funds, long-term mutual funds, hedge funds, and even retail investors will focus their attention and positions on these 'symbols of the times.' Emerging markets (including Hong Kong stocks) may face phased net capital outflows; the pricing after the listing of trillion-dollar AI companies will redefine the valuation benchmark for global tech stocks, possibly suppressing the room for imagination for Hong Kong-listed AI concept stocks such as Zhipu and MiniMax.
For Hong Kong stocks, the risk lies in: when global speculative capital is attracted by these 'aircraft carrier'-level IPOs, the liquidity premium of Hong Kong stocks themselves may be compressed, especially for those secondary stocks and technology stocks lacking scarcity and whose valuations are already priced in advance, which will face more severe tests.
Summary: Increased volatility makes stricter valuation scrutiny inevitable
Looking ahead to the subsequent trend of 2026, the Hong Kong stock market will face dual pressures: First, the global capital diversion pressure brought by giant IPOs globally, with the listings of companies like SpaceX and OpenAI continuing to attract global speculative capital, impacting the capital side of Hong Kong stocks; second, the internal capital diversion caused by the continued popularity of Hong Kong's own IPOs, along with the pressure of stricter market scrutiny on the valuations of new stocks and the secondary market.
Going forward, whether it’s existing stocks in the Hong Kong secondary market or upcoming IPOs, their valuations will face more rigorous scrutiny. Assets lacking core competitiveness and with inflated valuations may risk a correction, while low-valuation, high-dividend defensive blue chips and hard-tech companies with core technological advantages could deliver relatively stable performance amid volatility. For investors, it is crucial to clearly understand the current volatility dynamics of Hong Kong stocks, avoid blindly following trends, focus on changes in external variables, and concentrate on high-quality assets in order to navigate risks and seize opportunities in this complex market environment.
Author: Mao Ting
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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