Goldman Sachs expects Hong Kong's equity capital market (ECM) fundraising to exceed $100 billion (approximately HK$780 billion) this year, surpassing last year's level of around $97.1 billion. This projection was shared by Jacky Leung, Managing Director and Head of Corporate Client Business for Hong Kong at Goldman Sachs Global Banking & Markets, during a recent media interview. According to Goldman Sachs estimates, IPO fundraising in Hong Kong is anticipated to reach $28 billion this year, with an additional $40 billion from follow-on offerings and approximately $21 billion from convertible bonds (CBs), bringing total equity fundraising to over $100 billion. Of the $28 billion in IPO fundraising, about $18 billion is expected to come from A-share companies listing in Hong Kong under the "A+H" structure. Leung noted that the trend of A+H listings is unlikely to reverse in the short term, predicting more large-scale A+H listings from sectors such as resources and TMT (technology, media, and telecommunications) this year. Leung highlighted a significant return of foreign capital to Hong Kong, particularly evident in the second half of last year. He mentioned that many of Goldman Sachs' IPO book-building processes have essentially returned to 2021 levels, with full participation from cornerstone investors, anchor investors, and retail investors. Additionally, several leading international funds from Europe and the U.S. have re-entered Hong Kong's primary market. Leung expressed confidence that the momentum behind A+H listings and the participation of international funds in Hong Kong IPOs will continue. Regarding mergers and acquisitions (M&A) and refinancing activities, Leung stated that improved performance in Hong Kong's stock market and increased market liquidity are likely to make this year more favorable for M&A. He also expects convertible bond issuance to become more active, as it can complement share buybacks to mitigate dilution of shareholder stakes—or even increase them—while meeting corporate fundraising needs. Leung emphasized that Goldman Sachs maintains a rigorous company selection process for IPO projects, prioritizing sponsorship quality, which he considers crucial for successful post-IPO refinancing. He clarified that the firm does not face staffing shortages in its sponsorship work and does not compromise on fees or quality to gain market share. Despite a record number of IPO applications in Hong Kong, underwriting fees have hit a more than two-decade low. Leung acknowledged that Goldman Sachs is not immune to fee reductions by some investment banks but noted that the firm's fees reflect its service quality. He stressed that while quality is paramount, project size alone does not determine whether Goldman Sachs takes on an IPO; other factors have previously led the firm to decline large projects. As a sponsor coordinator, Leung highlighted the importance of skillfully allocating IPO shares. He explained that long-term investors who support the company post-listing typically receive about 50% of the book-building allocation. However, balancing post-listing liquidity—by accommodating more active funds and retail investors—is essential for maintaining stock performance. Leung also pointed out that assisting companies in differentiating themselves from competitors, effectively communicating their value proposition, and setting appropriate valuations are key factors influencing stock performance both at listing and afterward. He added that Goldman Sachs aims to grow alongside its clients, proactively supporting early-stage companies in artificial intelligence (AI) and other technology subsectors. The firm seeks to "kingmake" these companies, helping them become industry leaders by replicating past successes and guiding them toward achieving trillion-dollar market capitalizations.
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