Growing listing activity tests capacity of financial institutions to meet regulatory requirements
Unprecedented Listing Activity Creates Workforce Challenges
A critical shortage of qualified professionals risks undermining Chinese investment banks’ booming listing business in Hong Kong, according to industry sources and market analysts. This talent crunch arrives at a particularly challenging moment as these institutions face new regulatory rules governing the number of initial public offering mandates they can accept simultaneously. The situation tests their ability to capitalize on what has become one of the most robust IPO markets globally, with Hong Kong reclaiming the top position in global fundraising after years of subdued activity. Chinese investment banks have come to dominate market share in Hong Kong’s IPO sector, leveraging their deep relationships with mainland Chinese companies and understanding of cross-border regulatory frameworks. However, this success has exposed critical capacity constraints, particularly as the Hong Kong Stock Exchange and Securities and Futures Commission tighten quality standards for listing applications and increase scrutiny of underwriter responsibilities. The regulatory environment demands not only quantity of personnel but also specific expertise in compliance, due diligence, and Hong Kong securities law, creating intense competition for experienced professionals.
Market Dynamics and Regulatory Pressures
Hong Kong’s IPO market experienced remarkable resurgence in 2025, with 114 companies raising approximately 37.22 billion USD on the main board, representing a 229 percent increase from 11.3 billion USD in 2024. This explosive growth placed Hong Kong’s bourse well ahead of Nasdaq, which ranked second with 27.53 billion USD, and major Indian markets. The performance represents the best year for the Hong Kong exchange since 2021, when proceeds surpassed 42.97 billion USD, before a deep freeze amid post-pandemic economic challenges. Looking ahead to 2026, industry forecasters predict continued strength with approximately 160 new listings expected to raise between 300 billion and 350 billion HKD. This robust pipeline includes more than 300 candidates that have filed for listings, creating sustained pressure on investment banking resources. Major accounting firms including PwC, Deloitte, and KPMG have published optimistic outlooks, citing favorable government policies, improving market liquidity, and strong demand from both domestic and international investors for exposure to Chinese companies, particularly in the new economy sectors.
Competitive Pressures and Fee Compression
The talent shortage occurs against a backdrop of intense fee competition among investment banks. While Hong Kong has traditionally offered higher fee rates than some other markets, recent years have seen significant compression as banks compete aggressively for marquee mandates. UBS Group AG’s co-head of global banking for Asia Pacific, Gaetano Bassolino, acknowledged seeing fee compression in the Hong Kong market but noted that high volumes have more than offset this pressure. Despite declining fee rates, the dollar amount banks earned from Hong Kong listings in 2025 still rose along with overall deal volumes, with listings generating 489 million USD in fees, on track for the highest level since 2021. These figures exclude the one percent brokerage fees charged to investors and any incentive fees companies may have paid above base rates. Industry veterans note that securing a listing mandate often leads to additional business opportunities, such as wealth management services for company founders and executives, making even lower-margin IPO work strategically valuable for building long-term client relationships.
Structural Challenges and Future Outlook
The talent crunch reflects broader structural challenges in Hong Kong’s financial services sector. Despite the city’s long history as an international financial center, it faces competition from other regional hubs including Singapore, Shanghai, and increasingly from virtual offices enabled by technology. Experienced investment banking professionals, particularly those with dual expertise in mainland Chinese markets and Hong Kong regulatory frameworks, command premium compensation packages and have significant bargaining power. The regulatory environment has also become more demanding. In an unusual move, the Hong Kong Stock Exchange and Securities and Futures Commission issued a rare joint letter to underwriters warning of declining quality in listing applications and urging them to address growing irregularities. This increased scrutiny requires banks to invest more resources in due diligence and quality control, further straining limited personnel resources. For Chinese banks seeking to maintain and expand their market share in Hong Kong’s lucrative IPO sector, addressing the talent shortage has become a strategic imperative. Solutions may include aggressive recruitment from international banks, enhanced training programs, strategic use of technology to improve efficiency, and potential collaboration with smaller boutique firms to augment capacity during peak periods. The ability to attract and retain top talent will likely determine which institutions can capitalize on Hong Kong’s continued strength as a listing destination.
Wing Sum
Arts, Culture & History Journalist, Apple Daily UK
Contact: wingsum@appledaily.uk
Wing Sum is an arts, culture, and history journalist with professional experience documenting cultural heritage, artistic expression, and historical memory within Chinese-speaking communities. She received her journalism education at a prestigious Chinese journalism school, where she specialized in cultural reporting, archival research, and ethical storytelling.
Her work at Apple Daily and other liberal Chinese magazines and newspapers includes coverage of literature, film, visual arts, and the preservation of collective memory. Wing Sum’s reporting is grounded in interviews with artists, historians, and cultural practitioners, supported by archival sources and scholarly research.
She brings newsroom experience in balancing cultural critique with factual accuracy and historical context. Editors value her careful sourcing and resistance to sensationalism when covering sensitive historical topics.
Wing Sum’s authority is reinforced by sustained publication within established media institutions and adherence to editorial standards governing accuracy and attribution. At Apple Daily UK, she contributes culturally rigorous journalism rooted in experience, research, and professional integrity.
