Hong Kong stocks carry a permanent sense of mismatch: a fairly valued tech company with real cash flow and real growth optionality can sit at a mid-teens price-to-earnings ratio for a decade while its share price goes nowhere. Meanwhile, HKEX’s new listings raised 37.4 billion US dollars in 2025, up 231% year on year, reclaiming the top spot among global IPO venues. First in the world at fundraising; nowhere to be found in the return rankings. These two facts happening at once is not a coincidence.
Too Many Pumps in the Pool
Start with a liquidity ledger. The stock of money in a market is set short-term by macro conditions and long-term by returns — money flows in because returns exist here, and stays because returns get delivered. Hong Kong’s peculiarity is that every dollar entering must first pass a gate. Primary listings and follow-on offerings both drain the pool: in 2025 alone, IPOs took out 37.4 billion dollars, and adding 66 billion of refinancing, over a hundred billion left the pool in one year.
Water is leaking out while the pumps keep multiplying and getting stronger. The consequence writes itself: apart from a handful of hundred-billion and trillion-dollar giants that still get a share, thousands of companies have been pumped dry into zombie stocks and penny stocks, and the market’s valuation center sags a little lower each year. This is why ten-year returns are more honest than annual ones — the bleeding is not an anomaly of any particular year; it is the structure itself.
The Mall Owes Buyers Nothing
Is this structure a malfunction? Quite the opposite — it runs exactly as designed. Treat HKEX as a shopping mall: it collects stall fees and a cut of every transaction, and the investment banks are the floor staff steering tenants in. The mall owner and the floor staff share exactly one goal — get more companies listed. Whether the merchandise spoils after purchase is nobody’s liability, so long as disclosure procedures were followed. A bank’s core metric is selling the new shares; once the commission lands, what the price does afterward carries zero financial consequence.
So the number-one fundraising rank is not this market’s report card — it is this market’s mandate. It serves issuers, not investors.
Why Money Keeps Coming Into a Falling Market
Here is the real counter-question: if the market keeps falling, why does money keep flowing in? Through the 2025–2026 listing boom, the source of the trillions in fundraising is actually legible. Sovereign funds from the Middle East and Singapore, measuring returns in decades, buy core assets in Hong Kong at roughly a 30% discount to their A-share listings. Southbound money and mainland public funds follow the same leading companies offshore for compliant allocation. Industrial capital and local government vehicles subscribe to new shares to lock in supply chains or complete strategic tasks — they were never there to trade the stock price.
This money and the retail holder are not playing the same game. Retail needs the price to go up; they need discounted assets, strategic ties, mandates fulfilled. A market that keeps falling while placements stay red-hot is telling you the offer price is low enough — and the cheaper each new issue, the harder the drain on existing holders’ stakes. The very logic that brings money in deepens the sickness.
Price Is Not Money
One deeper illusion is worth dismantling. Two people can set a price: in the extreme case, a stock only needs two participants willing to bid against each other for the price to climb, and on paper everyone looks richer. But no new money exists — one bought, one sold. Hong Kong rallies are often exactly this kind of price phenomenon: the index rises, liquidity does not return, and paper wealth becomes no one’s cash. Price is set at the margin by two traders; money is the actual collateral underneath. Different things.
What Is Left
Once the structure is visible, the question changes from “why is Hong Kong so miserable” to “how do you survive inside this mall”. It is accountable to tenants, not to buyers — so the buyer’s only leverage is the merchandise itself: can the company keep paying out real cash in dividends and buybacks, and does the cash flow hold? When the market withholds a valuation, the dividend is the only promise still being honored. However beautiful the fundraising league table, that is someone else’s celebration; for a holder, cash actually received is the only debt this market can be made to pay.
