HKEX: Overall liquidity increased, with daily turnover in the spot market expected to grow by 90% year-on-year to HKD 250 billion in 2025.

On April 13, HKEX issued a statement saying that the trading activities in the Hong Kong stock market are becoming more balanced, with liquidity being evenly distributed among companies of different sizes and industries. Liquidity can reflect the ease of buying and selling securities and the efficiency of trading, which can be measured by indicators such as average daily trading volume. In recent years, overall liquidity in the Hong Kong market has increased, with the average daily trading volume in the cash market reaching a record-breaking HK$250 billion in 2025, a 90% annual growth rate. Increased liquidity indicates that the market is able to more efficiently absorb large trades: between 2022 and 2025, even though the average trade size has more than doubled (reaching US$334 million), the number of days required for trades of HK$50 million or more to be completed has decreased from an average of nearly 9 days to 5.5 days. Furthermore, trading activities are no longer concentrated on large companies with high market capitalization, but are gradually spreading to companies of various sizes and industries. Innovative companies driving diversified market development In recent years, the Hong Kong market has continuously optimized its listing mechanisms, including the addition of Chapter 18A and 18C to the Listing Rules and the introduction of a dedicated channel for technology and biotech companies. With a series of optimization measures in place, the number and variety of companies listed in Hong Kong has significantly increased in recent years, providing investors with more diverse investment opportunities. In particular, new innovative technology IPOs from industries such as healthcare and TMT (technology, media, and telecommunications) have listed in Hong Kong and have been warmly received by investors, driving a significant increase in stock market turnover. This reflects a shift in focus from investors in mainland China and around the world towards high-growth industries such as new energy, electric vehicles, and artificial intelligence. The active trading in the secondary market further attracts funds towards related sectors, continuing this new trend in investment activity. According to HKEX data, the total trading volume in the healthcare industry, including biotechnology, increased more than elevenfold from 2015 to 2025, and the liquidity in the TMT industry also increased tenfold, far exceeding the growth rate of the overall market trading volume (2.3 times) over the same period. These trends contribute to the long-term diversification of the market structure in Hong Kong, making Hong Kong a fundraising destination for companies in industries such as biotechnology, metals, and mining in 2025, solidifying Hong Kong's position as a leading global fundraising market. Growth momentum in trading of small and medium-sized stocks While the market is rapidly growing, the proportion of total trading volume in the Hong Kong market accounted for by companies of different sizes is also becoming more balanced, with increased trading activity of small and medium-sized companies in 2025. In the year, the average daily trading volume of stocks ranked 21st to 100th in market capitalization increased by US$1 billion, and stocks ranked outside of the top 100 increased by US$1.3 billion, representing annual growth rates of 19% and 17% respectively. Similarly, in terms of trading volume, stocks ranked 21st to 100th in market capitalization accounted for 29% (2024: 24%), while those outside of the top 100 accounted for 36% (2024: 30%). This indicates that in addition to well-known leading stocks, the market is also experiencing vigorous growth driven by medium and small-cap stocks. Attracting issuers of different sizes and industries to the market This shift in liquidity and adjustment reflects the exchange's long-standing efforts to optimize market microstructures and remove factors that hinder investors' participation in the Hong Kong market. For example, continuous review of trading unit structures, lowering the minimum bid-ask spread, and modernizing settlement infrastructure, all of these measures help reduce trading costs and facilitate investors to engage in trades of relatively smaller amounts but more frequent in buying and selling, which is particularly beneficial for smaller stocks. This not only enhances price discovery efficiency but also indirectly encourages investor participation. At the same time, HKEX continues to develop derivative products, ETFs, and thematic products related to specific industries or market capitalization categories, creating an interconnected product ecosystem that continues to grow and enhance market liquidity, further solidifying Hong Kong's position as a global financial center. With these factors combined, it creates an environment that can support intensified trading activities, driving the increased trading of shares of companies of different sizes and industries - whether they are large financial institutions, medium-sized industrial companies, or innovative biotech companies conducting groundbreaking clinical trials.