Goldman Sachs: The Hong Kong Stock Exchange (00388) has strong daily trading momentum, and the IPO pipeline for 2026 is expected to exceed the number of listings last year.

Goldman Sachs has released a research report maintaining its "Buy" rating for Hong Kong Exchanges and Clearing (00388) and continues to include it in the conviction buy list, with a target price of HKD 540. During an investor event, the management of HKEX stated that the number of new stock listing applications has reached a record high, alongside structural growth in derivatives products, which supports a strong momentum for the average daily turnover (ADT). Management expects there is still further upside for the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, as currently, less than 5% of retail investors in A-shares are active participants. The IPO pipeline for 2026 is expected to exceed last year's 119 listings, which is anticipated to contribute to double-digit ADT growth. In order to further expand its derivatives business, HKEX is exploring the launch of end-of-day options, with most of the development work for the Star derivatives platform expected to be completed by 2026, and the technology is set to be ready by 2027. Additionally, the exchange is also looking into extending trading hours for derivatives products to cover the closing period of the US stock market.