Hong Kong's stock market is witnessing more balanced trading activity, with liquidity becoming increasingly distributed across companies of varying sizes and sectors. Market liquidity, which reflects the ease of buying and selling securities and trading efficiency, can be measured by indicators such as average daily turnover. In recent years, overall liquidity in the Hong Kong market has strengthened, with the average daily turnover in the spot market reaching a record HK$250 billion in 2025, representing a 90% year-on-year increase.
Improved liquidity indicates the market can more efficiently absorb large transactions. Between 2022 and 2025, despite the average trade size more than doubling to $334 million, the number of days required to complete a placement of Hong Kong stocks valued at $50 million or more decreased from nearly 9 days to just 5.5 days. Furthermore, trading activity is becoming less concentrated in large-cap companies and is gradually flowing to a wider range of firms across more diverse industries.
Innovative companies are driving market diversification. The Hong Kong market has continually refined its listing mechanisms in recent years, including adding Chapter 18A and 18C to the Listing Rules and launching a specialist technology company listing pathway. As these optimization measures take effect, the number and variety of listed issuers in Hong Kong have expanded significantly, offering investors a broader array of investment opportunities.
A new generation of innovative technology issuers from sectors like healthcare and TMT (technology, media, and telecom) have listed in Hong Kong and received strong investor demand, significantly boosting stock market turnover. This reflects a gradual shift in focus from investors in mainland China and globally towards high-growth industries such as new energy, electric vehicles, and artificial intelligence. Active secondary market trading further attracts capital flows into these sectors, sustaining this new investment trend.
According to HKEX data, the total turnover for the healthcare industry, including biotechnology, grew more than elevenfold between 2015 and 2025. Liquidity in the TMT sector also increased tenfold, far exceeding the overall market turnover growth of 2.3 times during the same period. These trends contribute to the long-term diversification of the Hong Kong market structure, establishing it as a fundraising destination for companies in sectors like biotechnology and metals & mining by 2025, thereby reinforcing Hong Kong's position as a leading global capital market.
Simultaneously with rapid market growth, the share of total market turnover contributed by companies of different sizes has become more balanced, with increased trading activity observed among small and mid-cap companies in 2025. The average daily turnover for stocks ranked 21st to 100th by market capitalization increased by $1 billion, while turnover for stocks outside the top 100 increased by $1.3 billion, representing annual growth rates of 19% and 17%, respectively.
Similarly, in terms of turnover share, the proportion for stocks ranked 21st to 100th rose to 29% (2024: 24%), and the share for stocks outside the top 100 reached 36% (2024: 30%). This indicates a thriving market beyond the most well-known leading stocks, with a vibrant segment composed of mid-cap and small-to-mid-cap stocks.
This shift and adjustment in liquidity reflect the exchange's years of effort to optimize market microstructure and remove barriers to investor participation in the Hong Kong market. Initiatives such as ongoing reviews of board lot structures, reductions in the minimum tick size, and modernization of settlement infrastructure have helped lower trading costs. This benefits investors engaging in trades that may not be large in individual value but can be executed frequently, which is particularly advantageous for smaller stocks. It not only enhances their price discovery efficiency but also indirectly encourages investor participation.
Concurrently, HKEX has continuously developed derivatives, ETFs, and thematic products related to specific sectors or market cap classifications, establishing an interconnected product ecosystem. This ecosystem continues to grow, driving enhanced market liquidity and further solidifying Hong Kong's status as a global financial center.
The combination of these factors has created a market environment capable of supporting higher-intensity trading activity, boosting trading volumes for companies of all sizes and across various fields—from large financial institutions and mid-sized industrial firms to innovative biotech companies conducting groundbreaking clinical trials.
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