Hong Kong’s capital markets made remarkable strides across multiple asset classes over the past year, as investment funds, digital assets and equities delivered broad-based, quality growth to reinforce the city’s status as a leading international financial centre, according to the Annual Report 2025-26 of the Securities and Futures Commission (SFC) released today (Note 1).
Notably, with a world-class regulatory regime, Hong Kong’s asset management sector flourished with exchange-traded funds (ETFs) and locally-domiciled funds posting strong growth, while the digital asset ecosystem expanded through innovative products and services. Equity market reforms and deeper Mainland connectivity also boosted Hong Kong’s market depth and breadth.
The SFC’s Chairman Dr Kelvin Wong underscored that: “By fulfilling our dual mandate as market guardian and facilitator, the SFC aims to boost investor confidence, enable capital formation, and support inclusive, sustainable prosperity for Hong Kong’s capital markets. Amidst emerging challenges, the SFC will stay focused on its strategic priorities to entrench Hong Kong’s irreplaceable position as the vital financial gateway bridging the Mainland and the world.”
Chief Executive Officer Ms Julia Leung said: “In this ever-changing landscape, we are more committed than ever to fostering resilience as a powerful engine to support market transformation and technological innovation. The SFC’s executive team is committed to driving responsible innovation in our markets and fostering future-ready financial ecosystem.”
On the asset and wealth management front, Hong Kong has strengthened its role as a global hub over the past year. SFC-authorised ETFs and leveraged and inverse (L&I) products represent a fast-growing segment, as average daily turnover surged 50.6% year-on-year (YoY) to $38.1 billion and total market capitalisation grew 25.2% to $651.2 billion over the year ending March 2026 (Note 2). In particular, single-stock L&I products’ market capitalisation soared 60 times in the year. Additionally, Hong Kong-domiciled funds’ assets under management (AUM) jumped 19.4% to $2.3 trillion, driven by strong net inflows.
The digital asset ecosystem also saw vibrant developments. Tokenised investment products showed faster growth, with 13 SFC-authorised retail products’ AUM gaining nearly six times YoY to $10.8 billion as of March. The total market capitalisation of 11 virtual asset (VA) spot ETFs grew by a strong 90% since debut in 2024. The 12 licensed VA trading platforms saw turnover surge 125% over the past year. To sustain quality growth ahead, the SFC is working with the Government to complete the legislation for four new regulatory regimes – VA dealing, custody, advisory and management.
In the equity market, enhancing competitiveness remained a priority in the year. Post-IPO financing in Hong Kong saw healthy growth of 18% YoY to $259 billion as of March, alongside a 272% surge in IPO funds raised to $379 billion. Secondary market liquidity and efficiency improved on the back of reform measures: average daily turnover for Hong Kong market rose 54% to a record high of $258 billion; trading spreads narrowed by 38% and order execution time improved by 26% for related stocks under the first phase of minimum spread reduction.
Stock Connect remained a strong driver of market trading, as southbound daily turnover jumped 84% YoY to $124.1 billion and accounted for a record-high 24% of Hong Kong’s market turnover. For northbound trading, cumulative inflows to Mainland stocks since launch totalled RMB1.47 trillion, reaffirming Hong Kong’s vital role as a Mainland gateway. Northbound average turnover made up 6.3% of the Mainland market turnover last year.
Additional highlights:
a) New-economy listings continued to gain traction with the launch of Technology Enterprises Channel, as funds raised by new listings of specialist technology and biotech companies surged 660% YoY to over $42 billion last year. Meanwhile, to enhance listing quality, we have been conducting thematic inspections of selected sponsors after flagging issues of potential misconduct in early 2026.
b) Swap Connect – a mutual market access scheme to hedge Mainland interest rate exposure – registered more active investor participation and record monthly turnover (RMB821 billion in March 2026). Over RMB11.6 trillion in renminbi interest rate swap transactions were executed as of March.
c) In a landmark move to seek redress for investors, the SFC secured the first auditor compensation over false and misleading financial statements in April 2026, reaching an agreement with the auditor of a now-defunct company to set aside $1 billion to compensate independent minority shareholders.
d) To step up investor education, the SFC expanded its anti-scam publicity through community outreach in the year and launched an official Rednote account this April, which attracted more than 20,000 followers up to May.
The Annual Report, accompanied by a video message, is available on the SFC website, and its Facebook, LinkedIn, WeChat and Rednote pages.
Notes:
- The Annual Report 2025-26 covers the financial year from April 2025 to March 2026.
- Unless otherwise specified, figures are in Hong Kong dollars and as of end-March 2026 or for the financial year ending 31 March 2026.
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