At a recent UBS Securities media outlook session, Hu Zhizhi, President of UBS Group China and Chairman of UBS Securities, and Chen Ge, Co-Head of Global Investment Banking at UBS Securities, shared their latest assessment of China's capital markets for 2026.
They project that the IPO fundraising scale in the Hong Kong stock market could surpass HKD 300 billion in 2026, with the number of listings expected to reach 150 to 200. As Chinese companies accelerate their global footprint and foreign capital allocation demand rises, the fervor for Hong Kong IPOs is likely to continue. Concurrently, UBS anticipates earnings growth for the MSCI China Index could reach 14% in 2026, signaling a market driver shift from valuation repair to profit growth.
The Hong Kong IPO market has sustained the strong momentum seen in 2025. Hu Zhizhi revealed that since the first week of 2026, listing projects have been advancing at a rapid pace. "Judging by the project pipeline and progress rhythm, a new project emerges basically every one or two days," she noted, predicting the 2026 IPO fundraising scale could exceed HKD 300 billion with 150 to 200 listings.
This optimistic outlook is underpinned by several key drivers. Firstly, the unique positioning of the Hong Kong capital market has become increasingly evident since 2025. "Leveraging the Connect schemes, Hong Kong serves not only as a crucial gateway for international capital flowing into and out of China but also as a core platform for Chinese companies to connect with global investors," Hu Zhizhi stated.
Secondly, positive changes are occurring on both the supply and demand sides. "Hong Kong acts as a bridgehead, connecting Chinese enterprises and international investors," Hu Zhizhi explained. On the demand side, as capital market liberalization deepens, Chinese companies' outbound needs have significantly upgraded, evolving from single-market fundraising to systematic global capital allocation. On the supply side, amid heightened macroeconomic uncertainties, international capital's demand for diversified allocation has further increased. The potential demonstrated by China's technology and innovation sectors in 2025 has prompted global investors to reassess the medium-to-long term value of Chinese assets.
"The convergence of Chinese enterprises, global investors, and Hong Kong market's unique positioning ensures that the Hong Kong stock market retains considerable appeal in 2026," Hu Zhizhi concluded.
Global capital's attention towards the Chinese market is noticeably warming. Hu Zhizhi disclosed that the upcoming 26th UBS Greater China Conference in Shanghai next week has seen record-high registration, totaling 3,600 participants, including approximately 2,300 investors, marking an 11% overall increase. Notably, participation from the US, Europe, Middle East, and Africa regions surged by 32%, indicating a significant recovery in attention from global capital outside Asia.
"This indicates that foreign capital's renewed interest in Chinese assets is not just superficial but is translating into tangible behavioral changes," Hu Zhizhi commented. Foreign capital is shifting from a previously relatively passive stance of waiting or engaging in transient flows towards more active, long-term, and targeted participation in transactions. In Hong Kong IPO and follow-on offerings, the involvement of international long-term funds as cornerstone or core institutional investors has markedly increased.
From an allocation perspective, there remains substantial room for further foreign capital inflows. Tracking data from the top 40 global international investors by UBS shows that although foreign allocation to Chinese assets rebounded significantly in 2025, it still lags considerably behind the average levels seen from 2017 to 2021, suggesting ample room for growth.
"This is one of the key reasons we remain optimistic about the 2026 capital market," Chen Ge stated. In an environment of US interest rate cuts, global capital allocation is gradually shifting back from the US to other markets like China. Coupled with China's stable macroeconomic performance and a gradual easing of global trade frictions, global investors seeking investments with substantive growth are increasingly looking towards China.
Chen Ge added that from a supply perspective, China's capital markets offer an ample supply of high-quality targets. The pipeline for 2026 includes numerous IPO projects with fundraising scales exceeding USD 1 billion, with leading companies across various sub-sectors poised to list, providing a solid foundation for foreign capital inflows.
Looking ahead to the 2026 IPO market, Hu Zhizhi summarized the outlook with three keywords. The first is Globalization. Chinese companies' global expansion is upgrading from product export to the globalization of brands, supply chains, and capital structures, which will not only drive IPOs but also generate multi-layered financing needs including cross-border M&A and convertible bonds.
The second is Diversification. The Hong Kong market is accommodating an increasingly diverse structure. In terms of company types, industries are more dispersed, encompassing both emerging sectors like new consumer and AI tech, as well as traditional industries like industrials and healthcare. Regarding company size, forms are more varied, with initiatives like the Specialist Technology Company listing pathway further encouraging tech and innovation firms to seek listings. From a financing structure perspective, flexible instruments like convertible bonds allow companies to more effectively meet needs for equity, debt, and hybrid products.
The third is High Quality. Both the A-share and Hong Kong markets are undergoing a transition from emphasizing quantity to prioritizing quality. Hu Zhizhi noted that 2025 saw the lowest IPO break rate in the Hong Kong market in nearly five years. Investors are increasingly focusing on companies' fundamentals, governance capabilities, and long-term return potential, with pricing relying less on sentiment or narratives and more on solid fundamentals.
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