Core Insights - The average daily trading volume of Hong Kong stocks has exceeded 250 billion HKD since the beginning of this year [1] - Over 60 companies have listed on the Hong Kong Stock Exchange (HKEX) from January to September, raising a total of 182.9 billion HKD, ranking first globally [1] - There are approximately 300 companies waiting for listing approval, with half from new economy sectors such as electric vehicles, renewable energy, artificial intelligence, new materials, and biotechnology [1] - The main challenge for HKEX is to establish a more diversified ecosystem with multiple asset classes, as it has traditionally been strong in equities but relatively weak in fixed income [1]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) is expected to reclaim the top position in the global IPO fundraising market this year, driven by a strong pipeline of IPOs in the fourth quarter [1] Group 1: IPO Market Outlook - The fourth quarter is traditionally a peak season for new listings, with an estimate of over 20 IPOs expected in the next two months [1] - The total number of IPOs for the year is projected to exceed 100 [1] - Due to the absence of large IPOs after the listing of Sany Heavy Industry, the remaining new listings are expected to raise a significant portion of the total fundraising amount [1] Group 2: Fundraising Projections - The current fundraising amount stands at over HKD 200 billion, with expectations that the remaining IPOs could collectively raise several billion HKD [1] - The total fundraising for the year is anticipated to surpass HKD 300 billion [1]

Core Viewpoint - The 10th Pharmaceutical Innovation and Investment Conference, organized by the Hong Kong Stock Exchange, will be held from October 26 to 27 in Nanjing, focusing on the theme "Innovation. Ten Years. Investment. Future" [1] Group 1 - The conference will adopt a new roadshow recruitment format [1] - It aims to explore new trends in innovative development by integrating the latest domestic and international political and economic environments [1] - The event will create a dialogue platform covering the entire industry chain, including government, industry, academia, research, application, and investment [1]

Core Insights - Hong Kong's ETP (including ETFs and leveraged/inverse products) has achieved record daily trading volume, with a year-on-year increase of 146% in the first three quarters, making it the third-largest ETP market globally, surpassing South Korea and Japan [1][3] - The significant contribution from southbound capital, particularly in technology ETFs, has driven this growth, with the Hang Seng Tech Index ETP being a major contributor [2][3] - The asset management scale of Hong Kong's ETP market has grown by 34.1% year-on-year, reaching HKD 653.5 billion, with technology and biotechnology products being the most favored [4] ETP Market Performance - As of September 2023, the average daily trading amount for Hong Kong ETPs reached HKD 37.8 billion, marking a 146% increase year-on-year, establishing Hong Kong as a leading global market [3] - The turnover rate of Hong Kong's ETP market has surged to 14.7, solidifying its position as the highest globally [4] Southbound Capital and ETF Expansion - The inclusion of more ETFs in the Stock Connect program is expected in November, which will further enhance cross-border ETF trading activity [2][6] - The number of qualified ETFs under the Stock Connect has increased, with 290 ETFs currently eligible, including 273 mainland-listed and 17 Hong Kong-listed ETFs [6] Active ETFs Growth - Active ETFs in Hong Kong have seen a remarkable increase, with average daily trading volume growing over three times in the first three quarters of 2025, driven by strong market performance and robust company earnings [7] - As of September 2025, there are 31 active ETFs listed in Hong Kong, with a total market value of approximately HKD 23.7 billion, reflecting a 143% increase from the previous year [7]

Core Viewpoint - The Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Stock Exchange (HKEX) have taken disciplinary action against former directors of Star Universe Holdings Limited for failing to disclose significant financial liabilities in the company's prospectus during its IPO in May 2019 [1][2]. Group 1: Disciplinary Actions - Former non-executive director Lu Qingxing and former executive director Lu Zhufeng faced disciplinary actions due to their failure to disclose 13 outstanding loans totaling approximately RMB 49 million related to Star Universe's subsidiary [1]. - The SFC's investigation revealed that Lu Qingxing received at least RMB 44 million from these loans, which remained unpaid as of August 2020, constituting a significant financial liability not disclosed in the IPO prospectus [1]. - The HKEX issued a "statement of investor rights damage" against the two individuals, stating that their continued presence on the board would harm investor interests [2]. Group 2: Regulatory Compliance - The SFC emphasized the importance of directors fulfilling their fiduciary duties and ensuring compliance with relevant rules and regulations enforced by the SFC and HKEX [2]. - The actions of the two former directors raised serious questions about their suitability to serve on the board, highlighting the need for high transparency and diligence in financial disclosures and conflict of interest management [2]. - Star Universe's shares were listed on the HKEX on May 16, 2019, and are set to be delisted on January 26, 2024 [2].

Core Viewpoint - Morgan Stanley reports that the MSCI Hong Kong Index (MXHK) has returned 26% in USD terms year-to-date, indicating that Hong Kong remains one of the cheapest markets in the Asia-Pacific region, excluding ASEAN, with a forecasted P/E ratio still 0.3 standard deviations below the 10-year average [1] Group 1: Market Performance - The MXHK index's year-to-date return of 26% highlights a significant recovery trend in Hong Kong since 2023 [1] - The financial market performance in Hong Kong has been strong, and the residential property market is stabilizing [1] Group 2: Valuation and Forecast - Morgan Stanley has raised its year-end targets for MXHK to 13,000 and 14,000 points, assuming the index maintains or increases its P/E ratio relative to the past 10 years [1] - Potential targets for the end of 2026 are set at 14,366, 15,522, and 16,679 points, representing potential increases of 8%, 16%, and 25% respectively [1] Group 3: Investment Recommendations - The firm maintains a positive outlook for Hong Kong, expecting continued capital inflows, and has upgraded the telecommunications services sector to "overweight" [1] - Preferred stocks include Hong Kong Exchanges and Clearing (00388), Futu Holdings (FUTU.US), Galaxy Entertainment (00027), MGM China (02282), Techtronic Industries (00669), China State Construction International (03311), Henderson Land Development (00012), and MTR Corporation (00066) [1]

Core Insights - Hong Kong Exchanges and Clearing (HKEX) is currently leading the global IPO rankings, but CEO Bonnie Chan Yiting warns that fundraising activities may slow down due to geopolitical and economic risks [1][3] - Despite the caution, there is a strong pipeline of over 300 companies waiting to list on the HKEX, including the world's largest IPOs this year from Contemporary Amperex Technology (CATL) and Zijin Gold International [1][2][5] IPO Performance - In the first nine months of the year, 66 companies raised a total of US$23.27 billion on HKEX's main board, marking a 220% increase compared to the previous year [5] - CATL's IPO in May raised US$5.3 billion, while Zijin's fundraising last month amounted to HK$24.98 billion (US$3.2 billion) [2] Listing Trends - Approximately half of the listing applicants are classified as "new economy" companies, focusing on sectors such as electric vehicles, biotechnology, and AI [3] - HKEX, along with the Securities and Futures Commission, has implemented reforms to simplify the listing process, aiming to attract more international firms and specialized technology companies [4] Future Outlook - HKEX is positioned to reclaim the title of the world's annual IPO leader by 2025, supported by a robust pipeline of over 300 companies [5]

Core Insights - Hong Kong Exchanges and Clearing Limited (HKEX) is committed to enhancing collaboration with various parties, optimizing listing arrangements, and expanding connectivity mechanisms to promote the development of capital markets in both Hong Kong and mainland China [1][2] Group 1: Market Performance - Since September of the previous year, China's investment opportunities have gained global investor attention, leading to strong performance in the Hong Kong market, with trading volumes in the securities and derivatives markets reaching six-month highs [1] - As of September 30, 2023, the total IPO financing amount for the year reached HKD 182.9 billion, more than doubling compared to the same period in 2024 [1] - The average daily trading volume in the Hong Kong securities market was HKD 256.4 billion, a year-on-year increase of 126% [1] - The derivatives market saw an average daily trading volume of 1.68 million contracts, an increase of 11% year-on-year [1] Group 2: Strategic Developments - HKEX plans to launch the Hang Seng Biotechnology Index futures to meet the growing risk management needs of investors in the biotechnology sector [2] - The company is collaborating closely with the Shanghai and Shenzhen stock exchanges to incorporate REITs into the Stock Connect, introduce block trading mechanisms, and include RMB counters in the Hong Kong Stock Connect [2] - HKEX aims to enhance the international competitiveness of the Hong Kong stock market and cater to the diverse investment needs of global investors, including those from mainland China [2] - As a leading offshore RMB center, HKEX will continue to build a competitive ecosystem for fixed income and currency products, providing various asset allocation and risk hedging tools to support the steady internationalization of the RMB [2]

Core Viewpoint - Morgan Stanley anticipates strong revenue and profit growth for Hong Kong Exchanges and Clearing (HKEX) continuing until Q3 2025, driven by a robust average daily trading volume (ADV) of HKD 286 billion and high liquidity [1] Group 1: Revenue and Profit Growth - The firm expects core business growth to remain strong in Q3, with trading fees and clearing fees increasing by 75% and 97% year-on-year, respectively [1] - Revenue and profit are projected to grow by 47% and 59% year-on-year by Q3 2025, respectively, with EBITDA margin increasing by 7 percentage points to 80% [1] Group 2: Market Activity and Conditions - Increased trading activity in the Hong Kong capital market is noted as evidence of the financial system cycle bottoming out [1] - The second quarter's high foreign exchange earnings have created a high base, and the ongoing low interest rate environment is expected to lead to a 22% quarter-on-quarter decrease in net investment income for Q3 [1] Group 3: Investment Rating - Morgan Stanley maintains an "Overweight" rating for HKEX with a target price set at HKD 508 [1]

Core Viewpoint - Companies planning to shift their main business to Digital Asset Treasury (DAT) may struggle to achieve their goal of listing in Hong Kong due to the cautious stance of the Hong Kong Stock Exchange (HKEX) towards cryptocurrency accumulation platforms posing as listed companies [2][3] Regulatory Stance - HKEX has raised inquiries with at least five companies attempting to make DAT their core business, and none of these listing applications have been approved [2] - The regulatory approach of HKEX aligns with existing rules aimed at preventing the emergence of "shell companies" and ensuring that listed companies have substantive business operations [5][6] - The HKEX's decision reflects a broader regulatory framework in Hong Kong, where the Securities and Futures Commission has not prioritized DAT in its digital asset development policy [7] Market Impact - The DAT business model, characterized by a cycle of financing, cryptocurrency acquisition, market value growth, and refinancing, has attracted significant capital, with total financing exceeding $20 billion from early this year to late September [8] - Despite the influx of capital, many DAT companies are trading at or below their net asset values, raising concerns about asset bubbles and insider trading [9] - The restrictions imposed by HKEX may lead to a cooling effect on the cryptocurrency sector, prompting investors to reassess compliance risks and focus on regulated products [10] Future Directions - Companies looking to enter the digital asset space must integrate their operations with the real economy, as exemplified by firms like 瑞和数智, which are investing in Web3.0 and collaborating on real-world asset digitization [11] - There remains potential for DAT companies to gain regulatory approval if they can connect their cryptocurrency assets with practical applications such as supply chain finance and cross-border payments [11] - The decision by HKEX aims to maintain stability in traditional capital markets while allowing room for compliant innovation, potentially positioning Hong Kong as a model for digital transformation in global financial centers [11]