<div id="readability-page-1">A growing number of Hong Kong-listed companies are tapping strong equity market sentiment to issue convertible bonds, a trend bankers expect to continue. Eleven companies raised US$7.4 billion through convertible bonds in the first five weeks of 2026, about 47 per cent of last year’s US$16 billion total, according to Dealogic. Tianqi Lithium, one of the world’s largest producers of lithium-ion battery materials, announced on Wednesday that it would raise about HK$5.9 billion (US$755 million) from a combination of share placement and a convertible bond. That came a day after leading Chinese broker Huatai Securities said it would raise HK$10 billion through a convertible bond. Earlier, Chinese sportswear group Xtep said it would issue HK$500 million in convertible bonds to institutional investors. “The volume has been pretty crazy since the beginning of January,” said Olivia Li, who leads the Greater China equity-linked business at Citi. The number of companies rushing to issue convertible bonds was growing and bankers were busy with deals even as the Lunar New Year approached, market players said. “The key reason is that the equity market has started pretty strong this year,” said Li. “So everyone is trying to take advantage of the current high share prices to raise money by issuing equity-linked instruments, such as convertible bonds.” Convertible bonds are securities that can be converted into shares at a predetermined price, typically set at a premium to the current share price. When share prices are high, issuers can fix a higher conversion price, and investors gain more confidence that the stock will rise enough to make conversion worthwhile.  The Hang Seng Index corrected last week amid a sell-off in tech stocks and gold, following strong momentum when the index crossed 28,000 points on January 29, a level last seen in 2021. “If you compare convertibles with straight equity, convertibles definitely give issuers the opportunity to issue at a premium to the current share price level,” said Li. Tianqi set its conversion price at HK$49.56 per share, a 0.1 per cent premium to the previous day’s closing price and 4.4 per cent above the average closing price of the past five trading days. Huatai set premiums of 6.78 per cent and 5.09 per cent, respectively. The instrument was a cost-effective way to raise funds in a high interest rate environment, offering advantages over the immediate dilution of issuing new stock, according to Anna Fung, senior analyst at Futu Securities. “Additionally, if the stock price increases – a sign of positive company prospects – the company can repurchase the stock, ultimately creating a win-win situation for both parties.” For Chinese issuers, longer-dated convertibles were treated as debt and required approval from the National Development and Reform Commission, while one-year deals typically did not, allowing companies to move as quickly as they would with a straight equity offering when markets were strong, Li said. This financial instrument was ideal for investors who wanted to protect their money with bond-like features such as interest and repayment of principal, while still having a chance to profit if the company’s share price rose, according to Fung. If stock prices rose, investors could convert bonds into shares, said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Pro­fessional Commentators. “If prices fall, they take back their principal.” More investors were coming into Asia’s convertibles market, according to Li. “The universe has been expanding,” she said. “For example, some European or US convertible houses have been moving people or hiring new staff in Asia to expand the business.” Li said she expected the momentum to continue. “The pipeline or the companies that are considering to issue this product has been growing,” she said. “But again, it’s still subject to factors like how long the market can sustain its momentum.”</div>

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<p>A surge in Hong Kong-listed companies issuing convertible bonds is underway, with 11 firms raising US$7.4 billion in early 2026, driven by strong equity market sentiment. Notable issuers include Tianqi Lithium and Huatai Securities. Bankers anticipate this trend will persist as companies leverage high share prices to issue equity-linked instruments. Convertible bonds offer advantages over straight equity, allowing issuers to set higher conversion prices and providing investors with bond-like security while retaining profit potential. The expanding market is attracting more investors, with expectations for continued momentum, contingent on market conditions.</p>

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TIANQI LITHIUM

Ganfeng Lithium

GANFENGLITHIUM

Hong Kong firms rush to issue convertibles – and trend could continue: bankers