Ge Long Hui·2025-07-11 02:54Core Viewpoints - Hong Kong Stock Exchange (HKEX) reported a significant increase in market activity, with the average daily turnover (ADT) reaching HKD 2,376.77 billion in Q2 2025, a year-on-year increase of 95.46% [1][2][3] - The influx of southbound capital has contributed to high trading volumes, with a total net purchase of HKD 2,728.63 billion from April to June 2025, marking a 24.77% increase year-on-year [3][4] - The number of new IPOs in Q2 2025 rose to 27, up by 9 from the same period last year, with total IPO fundraising amounting to HKD 880.43 billion, a year-on-year increase of 906.67% [1][3][5] Market Performance - As of June 2025, the market capitalization of the Hong Kong securities market stood at HKD 42.68 trillion, reflecting a 6.84% increase quarter-on-quarter and a 32.82% increase year-on-year [2] - The Hang Seng Index increased by 4.12% in Q2 2025, while the Hang Seng Tech Index experienced a slight decline of 1.70% [2] IPO and Trading Activity - The surge in IPO activity was driven by major A-share companies listing in Hong Kong, including notable firms like CATL and Hengrui Medicine, which collectively raised HKD 737.72 billion, accounting for 83.79% of the total IPO fundraising in Q2 [3][5] - Derivatives and commodity contracts saw increased trading volumes due to heightened demand for risk hedging, with average daily trading volumes for futures and options reaching 1.54 million contracts in Q2, a 15.34% increase year-on-year [3][4] Investment and Future Outlook - Despite a decline in investment returns due to lower HIBOR rates, the overall yield remains high, with expectations of continued growth in Q2 performance [4][5] - The company maintains a "buy" rating, projecting a target price of HKD 480.08 per share based on a 40x PE ratio for 2025, indicating a favorable outlook for future market activity and valuation recovery [7]