17 trillion restricted shares will be released, Hong Kong stocks are facing a major test of lifting restrictions. How to deal with it?

After experiencing the glory of winning the global championship in the 2025 IPO, the Hong Kong capital market officially entered the "debt repayment period" in 2026. Data from Wind shows that the total market value of restricted shares awaiting to be unlocked in the Hong Kong stock market in 2026 is approximately HK$1.7 trillion, nearly three times higher than the unlocking scale of HK$0.6 trillion for the whole year of 2025, setting a new annual unlocking peak in recent years. This amount is equivalent to six to seven times the daily trading volume of the Hong Kong stock market, posing a continuous test on market liquidity, individual stock pricing, and investor behavior. The wave of unlocking shares is a delayed reflection of the IPO boom in the Hong Kong stock market. In 2025, with 119 new listings and a fundraising amount of nearly HK$290 billion, the Hong Kong stock market returned to the top of the global IPO fundraising list, with a significant increase of 225.9% year-on-year. Many leading companies in the technology manufacturing, biopharmaceutical, and digital economy sectors concentrated on the main board, attracting cornerstone investors, controlling shareholders, and Pre-IPO institutions to rush in. Brokerage firms predict that the IPO frenzy will continue in 2026, with fundraising reaching HK$89.2 billion in just the first two months. The number of companies queuing for listing has exceeded 380, including over 110 A-share companies. According to the rules of the Hong Kong Stock Exchange, cornerstone investors usually have a lock-up period of 6 months, while controlling shareholders and major shareholders have lock-up periods ranging from 6 to 12 months. This means that the high-quality assets that were listed intensively in the first half of 2025 will see their restricted shares released in the first and second quarters of 2026, while the giants listed in the second half of the year will form the main force of unlocking in the third and fourth quarters. Faced with high pressure throughout the year, with a peak in September, technology and consumer goods companies become the main players in unlocking. Puyin International's research report points out that there will be six months in 2026 with monthly unlocking amounts exceeding HK$100 billion. Among them, September will be the "eye of the storm" for the whole year, with an estimated market value of unlocked shares reaching as high as HK$530.9 billion in a single month, accounting for 32.6% of the total for the year. This monthly amount even exceeds the total IPO fundraising amount for half a month in 2025. Such intense chip releases are extremely rare in the history of the Hong Kong stock market. The pressure of unlocking in the first half of the year is also significant, with intensive unlocking in the information technology and biopharmaceutical sectors in March and April, with monthly amounts exceeding HK$100 billion each, forming a dual peak pressure along with the peak in September. The main subjects of unlocking are IPO investors, cornerstone investors, and controlling shareholders. The lock-up period of cornerstone investors will usually expire after 6 months, constituting the main short-term selling pressure; controlling shareholders and Pre-IPO investors have lower holding costs, and their willingness to sell after unlocking is more uncertain. In terms of sectors, information technology, consumer goods, and healthcare are the three core areas of unlocking, accounting for over 60%. With the addition of some financial and resource leaders with large amounts of unlocking, both growth stocks and heavyweights face pressure from an expanded float. At the individual stock level, the market value of unlocked shares of many leading companies exceeds HK$100 billion, and the proportion of unlocked shares to total shares outstanding exceeds 50%, nearly doubling the float. Unlike the relatively stable macro environment in 2025, the unlocking wave in 2026 faces a more complex global situation. As geopolitical tensions escalate in March, the situation in the Middle East becomes tense again, leading to fluctuations in Brent crude oil prices and a resurgence of global inflation expectations. This directly restricts the overall risk appetite for Hong Kong stocks. Nevertheless, from a market performance perspective, Hong Kong stocks still exhibit resilience. Short-term liquidity is under pressure, and individual stocks and sectors diverge instead of experiencing a widespread decline. With a trillion-dollar peak unlocking, the most direct concern in the market is the liquidity draining effect. The daily trading volume of Hong Kong stocks currently remains at the level of HK$200 billion. With a unlocking scale of HK$1.7 trillion, it is equivalent to absorbing nearly 10 days' worth of trading volume for the whole year. In the backdrop of tightening global liquidity, increasing volatility in foreign capital flows, and a slowdown in Southbound fund inflows, the market's capacity for absorbing this unlocking faces a severe test, leading to sustained sell-offs in some small-cap stocks, and low-liquidity stocks. However, unlocking does not necessarily mean automatic selling, as market impact will present structural differentiation. High-quality leading companies with stable fundamentals and concentrated institutional holdings have weaker shareholder selling intentions and may even see their index weight increase due to the expansion of float, attracting passive fund allocations. On the other hand, companies with weaker fundamentals, higher valuations, and dispersed shareholder structures are more likely to face concentrated selling pressure, resulting in significant price fluctuations before and after unlocking. Zhang Yidong of Guotai Haitong points out that macro fundamentals and the global liquidity environment remain core factors determining the direction of the Hong Kong stock market, with unlocking posing more of a structural disruption rather than systemic risk. Zhang analyzes that in the second half of 2026, based on the midterm elections in the United States and the easing cycle of the Federal Reserve, the impact of the peak unlocking in Hong Kong stocks will be relatively predictable. Based on historical data of billion-dollar unlocking events in the Hong Kong stock market, the Hang Seng Index did not show systemic declines during the unlocking window period (T-20 to T+20 trading days), but instead exhibited a pattern of "pre-unlocking fluctuations followed by stabilization after unlocking." Moreover, from an industry structure perspective, the unlocking scale in 2026 is typically concentrated in the core sectors of information technology, consumer goods, and healthcare, which may magnify phase-related volatility on a sector level during the unlocking period. A study by CMSC (Hong Kong) suggests that the negative impact of unlocking restricted shares on the Hong Kong stock market is more sustainable. Stocks have shown early declines before unlocking, and post-unlocking cumulative abnormal returns continue to decline; at the market level, the unlocking scale is significantly negatively correlated with the Hang Seng Index return rate, with additional supply of liquidity suppressing market risk appetite. Historical data shows that the impact of unlocking on the market is more of a short-term disruption rather than a trend reversal. During the peak of small-scale unlocking at the end of 2025, although some stocks experienced daily declines of over 10%, the Hang Seng Index did not show systemic declines, and core assets maintained their resilience. In 2026, supported by macroeconomic recovery and continued improvement in corporate earnings, the impact of unlocking may gradually be absorbed, challenging the market's long-term operating logic. Trading strategies during the unlocking wave For investors, the unlocking wave will reshape trading strategies: firstly, avoid high-proportion unlocking, high valuation, and low liquidity targets; secondly, focus on leading companies with solid fundamentals, stable shareholder structures, and ample cash flow; thirdly, grasp the risk-avoidance rhythm of key windows such as September, and avoid chasing after prices before unlocking. CMSC (Hong Kong) suggests that during the large-scale IPO subscription period, investors should moderately reduce their positions or avoid sectors where funds may flow out, and focus on short-term recovery opportunities brought by the return of funds after the subscription period ends; during the peak unlocking period, it is important to pay more attention to the sustained impact of potential selling pressure on individual stocks and market sentiment, and to be cautious with companies with large unlocking scales and low early investor costs. In the long term, there is no need to change core allocations due to the expansion of IPOs. Investors should focus more on high-quality companies with solid fundamentals and sustainable business logic, navigating through the emotional cycles of "supply shocks." After the release of liquidity pressures, look for structural opportunities in "mispriced" stocks. Puyin International points out that the unlocking wave will not lead to a significant market decline, but stocks with a high proportion of unlocking may face pressure before and after unlocking. For strong companies with solid fundamentals, if unlocking triggers irrational declines, it may provide opportunities for medium- to long-term positioning. This article is reproduced from "Cailianshe", GMTEight Editor: Liu Jiayin.