Share sales in Hong Kong have nearly quadrupled this year to more than $73 billion through initial public offerings, placements and block trades.

For the first time since 2013, that made the Hong Kong Special Administrative Region the No 1 fundraising spot in Asia, ranking just behind the US globally.

The city has been at the front of a dealmaking boom across the continent that included a record year for IPOs in India, and strong markets in the Chinese mainland and Japan.

In the Hong Kong SAR, mainland companies fueled the frenzy with gargantuan deals to power their global expansion plans.

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Battery maker Contemporary Amperex Technology Co raised $5.3 billion in the world’s second-largest listing in May. Electric-vehicle maker BYD Co and EV-to-smartphones giant Xiaomi Corp also raised more than $5 billion each in share placements. Deals even powered ahead as the US rolled out tariffs, and some faced pushback from US politicians.

“This year has exceeded expectations,” said James Wang, head of equity capital markets for Asia excluding Japan at Goldman Sachs Group Inc. “We expect volumes to continue rising, albeit at a more measured pace.”

The upswing has been broad-based across Asia. Four of the world’s five largest share-sale venues are in the continent, including the HKSAR, the mainland, India and Japan. For the first time, four Asian markets were among the top five in the world for share sales, according to data compiled by Bloomberg.

The Hong Kong IPO pipeline looks healthy as well, with about 300 companies waiting to list their shares, according to the Hong Kong stock exchange. In a sign of the feverish pace of dealmaking, Hong Kong Exchanges & Clearing Ltd and the market watchdog had to scold banks over filing shoddy applications. The torrent of deals is also making some investors cautious.

“Investor discipline on valuation and fundamentals is likely to be higher after such a strong year,” said Zhe Song, a senior investment specialist at BNP Paribas Asset Management in Hong Kong. Song said his funds managed by his team would selectively participate in high-quality deals related to innovation, manufacturing of heavy machinery for use in robotics, and new consumer trends.

The flood of share sales is a stark contrast to a drought that started in 2022, when borrowing costs rose while geopolitical tensions intensified.

This year, the Hong Kong market became a beneficiary of the mainland’s artificial-intelligence ambitions, advances in biotechnology, efforts by Beijing to boost domestic demand, and gains in global prices of gold and aluminum.

“Sectors that are still in line with China’s key strategies will be more active to get on an IPO,” said Shi Qi, deputy head of capital markets at China International Capital Corp. These include companies related to technology, advanced manufacturing and robotics, Shi said.

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Heavyweight listing candidates expected to come to the Hong Kong market next year include those whose shares aren’t trading elsewhere. That would be a fresh crop of deals on top of second listings of mainland-traded firms that dominated this year’s pipeline.

The biggest potential IPOs include mainland-owned Swiss agricultural technology company Syngenta Group and CK Hutchison Holdings Ltd’s health and beauty retailer A.S. Watson Group, people familiar with the matter have said. The mainland’s AI darlings are also expected to list their shares.

“If you look at the pipeline, it’s huge,” said Peihao Huang, head of Asia-Pacific equity capital markets at JPMorgan Chase & Co. “The test will be how the market is going to take up that supply, at what valuation and what sort of pace because it hasn’t been this busy for the last couple of years."

Hong Kong listings have generated a weighted average return of almost 50 percent this year from their debut prices, outperforming the Hang Seng Index. But how many of the 300 deals come to fruition next year — and how well they do — will hinge on the performance of the broader stock market.

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“Investors are likely to be a bit more price-cautious and selective in terms of participation,” said Rob Chan, Citigroup Inc’s head of Asia equity capital markets syndicate. 

Chan said he still expects a busy 2026, with lockup expiries from this year’s listings potentially fueling block trades by existing shareholders, additional share sales by companies and the issuance of bonds that can convert into stocks.

The euphoria is also apparent in the mainland, which in 2022 trumped the US as the world’s biggest share-sale market until it underwent a self-imposed tightening starting the following year. 

Retail investors have been clamoring over IPOs of mainland chipmakers — which align with Beijing’s goal of technological self-sufficiency. Shares of industry leader Moore Threads Technology Co surged more than 400 percent in their recent Shanghai debut.

Asia’s Dominance

Elsewhere in Asia, India has also been carrying a chunk of the region’s deals.

“Today, we have a lot more billion-dollar-plus deals than ever before,” Manan Lahoty, head of capital markets at law firm Cyril Amarchand Mangaldas, said of the India market. “This year itself we would end up filing or launching more than all the past years put together.”

In India, IPOs hit a second consecutive year of record with more than $20 billion in proceeds, thanks to an expanding pool of money from domestic mutual funds and retail investors. Existing shareholders have also rushed to sell their holdings through block trades.

Juggernauts lining up to list in Mumbai next year include Reliance Industries Ltd’s telecommunications unit Jio Platforms Ltd, which may be the country’s biggest-ever IPO. International companies may also continue tapping India’s rising valuations to list subsidiaries, said Peter Guenthardt, head of Asia-Pacific global corporate and investment banking at Bank of America Corp.

“Every multinational with a sizable India business is one way or the other considering whether to take that piece public,” Guenthardt said.