Hong Kong’s capital markets delivered another quarter of strong growth despite global market volatility, powered by offshore product breakthrough, sustained Stock Connect inflows and vibrant IPO activity, according to the Securities and Futures Commission’s (SFC) Quarterly Report published today.
For the quarter ending June, the city made further progress on multiple fronts as a Mainland market gateway. The SFC approved the Hong Kong Exchanges and Clearing Limited’s launch of Five-Year China Government Bond Futures, which commenced trading in early August. As the only offshore China Government Bond Futures available, this product has drawn market interest from various types of investors, further strengthening Hong Kong’s role as a risk management hub for RMB assets and supporting the internationalisation of RMB.
Swap Connect trading also remained active, as average daily turnover jumped 50% year-on-year (YoY) and aggregate RMB interest rate swap transactions surpassed RMB13.3 trillion. Southbound Stock Connect recorded a 34th consecutive month of net inflows – the longest streak on record. Cumulative net inflows since launch surpassed $5.4 trillion, while daily southbound trading accounted for 22% of Hong Kong’s market turnover (Note 1).
New listing activity continued to thrive in the past quarter, as funds raised rose 12% YoY to about $100 billion. Nine A-share listed companies raised over $50 billion through H-share IPOs. In particular, funds raised by specialist technology and biotech companies surged 420% YoY.
To further reinforce the city’s role as a super-connector, the SFC and the China Securities Regulatory Commission announced a package of measures in August to deepen market cooperation (Note 2). The SFC also entered into a memorandum of understanding with the Securities Commission Malaysia in July to expand fund and dual listing cooperation (Note 3).
“Hong Kong plays a unique and important role in supporting the high-quality development and opening-up of the Mainland financial markets,” said Dr Kelvin Wong, Chairman of the SFC. “By deepening the links between Mainland and global markets while upholding our market resilience, Hong Kong can further strengthen its contribution to the Nation's development as a financial powerhouse.”
“The past quarter underscored the dynamism of Hong Kong as a leading international financial centre, supported by seamless cross-boundary collaboration and vibrant fund-raising activity,” said Ms Julia Leung, Chief Executive Officer of the SFC. “The SFC will step up its efforts to bolster the city’s unique role as a premier China gateway through a balance between investor protection and market innovation.”
On the asset management front, SFC-authorised exchange-traded funds (ETFs) and leveraged and inverse (L&I) products recorded strong growth, with total market capitalisation up 43% YoY to $756.3 billion as of end-June. In July, the SFC enhanced the regulatory framework for L&I products to allow product providers more flexibility while raising investors’ awareness of their nature as daily trading instruments.
Other highlights:
a) Total assets under management of 15 tokenised retail products reached $10.3 billion, up 280% YoY (Note 4). The combined market capitalisation of 11 virtual asset spot ETFs increased 55% since launch to US$451 million.
b) The SFC received 2,456 licence applications in the quarter, up 9% YoY (Note 5). As of end-June, the total numbers of licensed corporations and individuals rose about 5% YoY, respectively.
c) In April, the SFC secured the first-ever auditor compensation over false and misleading financial statements, reaching an agreement with the auditor of a now-defunct company to set aside $1 billion to compensate independent minority shareholders.
d) The SFC completed a thematic review of selected brokers’ account-opening practices for Mainland investors, and issued a circular providing guidance on additional account-opening measures.
e) The SFC’s official RedNote account has gained traction since April launch, with the number of followers rising continuously to over 22,000, helping to raise the public’s anti-scam awareness.
The Quarterly Report is now available on the SFC website.
Notes:
- Unless otherwise specified, all figures are for the quarter ending June 2026 or as of end-June 2026, and denominated in Hong Kong dollars.
- The new measures cover a wide range of areas, including listing and fundraising, index cooperation, futures products, ETFs, the internationalisation of financial institutions, green finance and professional qualification facilitation. See the press release on 3 August 2026.
- The memorandum of understanding aims to expand the scope of products eligible under the mutual recognition of funds and facilitate a simplified dual IPO listing framework. See the press release on 23 July 2026.
- These include the introduction of tokenised classes to existing SFC-authorised funds.
- This does not include applications for provisional licences.
