<div id="readability-page-1">Stepping into the former trading hall in Exchange Square on Thursday was like walking through a doorway into the 1980s. Brokers, wearing the iconic red jackets of the period, stood alongside Cathay Pacific Airways flight attendants in retro uniforms, evoking memories of the hall before its closure. The special gong-striking ceremony in Central marked the 40th anniversary of the merger of Hong Kong’s four stock exchanges into the Stock Exchange of Hong Kong (SEHK). Cathay was the first company to list on the unified bourse in May 1986. “Let’s honour 1986 not just as history but as an inspiration – the vision that forged a unified exchange and brought Cathay to the market,” said Carlson Tong Ka-shing, chairman of Hong Kong Exchanges and Clearing (HKEX), which became the holding company of the stock exchange in 2000. “This is the same vision that guides us today: integrity, innovation and an unwavering commitment to keeping Hong Kong open, connected and ready for the next 40 years,” Tong said. “We have evolved from a locally focused exchange into a global superconnector that connects the best of Asia’s growth opportunities to international capital.” From chalk sticks and blackboards to artificial intelligence servers and semiconductors, the exchange has evolved into a global fundraising hub. Today it faces two powerful forces: the memory chip supercycle and intensifying competition for initial public offerings (IPOs) from US and mainland markets.  Supercycle lifts Hong Kong IPOs Hong Kong is reaping the rewards of the supercycle – an explosive surge in memory chip demand driven by the AI boom. The upswing has lifted Chinese tech firms and fuelled a surge of IPOs in the city. Hong Kong’s main board ranked first worldwide for hi-tech IPOs – including semiconductors and AI hardware – from July last year until mid-May, with 44 companies raising US$17.44 billion, according to data from LSEG Data and Analytics. Nasdaq followed with 23 hi-tech IPOs raising US$13.2 billion, while the New York Stock Exchange finished in the top three with five firms raising US$4.43 billion. Shanghai’s Star Market ranked fourth with 10 listings raising US$3.3 billion.   The HKEX main board pipeline now exceeds 500 candidates overall, up from about 300 at the end of last year, including at least 12 AI-related companies involved in servers, photonic computing components and optical modules. That surge reflected the broader architecture of the AI boom itself, which industry leaders said was redefining capital markets from the ground up. Jensen Huang, CEO of US chip giant Nvidia, recently likened AI to “a five-layer cake”. At the top, he said, were applications such as chatbots. The layer below was the software, which included large language models, while further down were infrastructure and memory chips. Huang forecast AI-related capital expenditure worldwide could reach US$4 trillion by 2030. At the same time, South Korea’s memory heavyweight Samsung Electronics said the chip industry was entering “an unprecedented supercycle”, while Nomura predicted the global memory market would grow 258 per cent year on year to US$859 billion this year and 38 per cent year on year to US$1.2 trillion in 2027. Global rivals intensify competition While such momentum and fundraising demand could create opportunities for Hong Kong, challenges remain. Shanghai and Shenzhen are also competing for listings, and Nasdaq is set to reclaim the top spot next month, with Elon Musk’s SpaceX eyeing a US$75 billion IPO – potentially the biggest in history that could drain global liquidity. Brokers and bankers said HKEX could manage the pressure. The bourse operator has recently proposed reforms to boost competitiveness, including lower capital requirements for weighted voting rights firms, confidential filing options and easier access for international listings. “We have been seeing increasing interest from both issuers and investors given the positive industry development as well as the outlook,” said John Lee Chen-kwok, vice-chairman and co-head of Asia coverage at UBS in Hong Kong. “Despite some issuers choosing A shares, Hong Kong remains an attractive option for a number of players in this space, given strong international long-only investor interest and secondary aftermarket liquidity.”  Edward Au, southern region managing partner for Deloitte China, shared the view. “As investors worldwide look for exposure beyond US technology giants, Hong Kong is well positioned to become a key offshore fundraising platform for China’s next generation of semiconductor, AI compute, robotics, and advanced manufacturing companies,” Au said. The easing of conflicts in the Middle East in April also turned investors “risk-on”, channelling funds into the AI chip and hardware stocks in South Korea, Taiwan, mainland China and Japan, according to Ken Wong, Asia equity portfolio specialist at Eastspring Investments. In the past decades, Hong Kong has built a strong record in the technology, media, and telecommunications sectors, “attracting same-industry issuers and leaving a solid image among global investors”, Wong said. Julius Baer expected AI to remain a key driver of Asian equity markets in the second half of the year, but the Swiss bank preferred mainland-listed shares over those traded in Hong Kong, citing higher AI exposure. Mainland rally tests Hong Kong’s edge The Hang Seng Index and Hang Seng Tech Index have both eased so far this year – down 1.7 per cent and 11 per cent, respectively, based on exchange data as of Friday. Analysts said this was largely because the benchmarks lacked exposure to AI components. In response, both the HKEX Tech 100 Index and the Hang Seng Tech Index announced plans to add more AI stocks starting next month. By contrast, the Star 50 – the benchmark for China’s Star Market on the Shanghai Stock Exchange, which has heavier AI weighting – surged above 1,800 points for the first time in mid-May. Despite a recent pullback, the index was still up about 30 per cent for the year as of Friday. That rally has been fuelled in part by a wave of domestic chipmakers tapping the market. Nvidia challengers such as Moore Threads Technology and MetaX Integrated Circuits listed on the Star Market in December. Two Chinese memory giants – CXMT Corporation and Yangtze Memory Technologies Company, known as YMTC – are advancing towards their debuts on the Star Market. Baidu’s chip unit Kunlunxin is also seeking an IPO in Shanghai, even as it prepares for a Hong Kong listing later this year. How a merger built investor confidence Henry Wu King-cheong, a committee member of the Stock Exchange of Hong Kong in 1986, said the city should not worry about competition. “Competition can drive everybody to improve, and the history of the Hong Kong financial market shows that we can always evolve to offer new products and services to turn all the challenges into opportunities,” Wu said at the anniversary celebration.  “Before 1986, Hong Kong had four local exchanges, where traders used chalk sticks and blackboards to trade. We combined the four exchanges to create the Stock Exchange of Hong Kong, with a new trading hall, telephones and other equipment for trading. “It was only through the combined exchange that we had the scale and modern facilities to attract international investors to come to trade here. That was a game changer.” The numbers underline Hong Kong’s progress. As of April, HKEX had 2,714 listed companies with a total market capitalisation of HK$48 trillion (US$6.1 trillion) – 114 times its size in 1986, when it had 253 listed companies and a market capitalisation of HK$419.28 billion. Daily turnover had risen to HK$271.1 billion as of April, 544 times that of the HK$498 million in 1986, exchange data showed.     “The merged exchange had given the central government confidence to let mainland enterprises list in Hong Kong since 1993, paving the way for the city to become a fundraising hub for Chinese companies,” said veteran broker Christopher Cheung Wah-fung, founder and CEO of Christfund Securities. The Stock Connect schemes launched in 2014 further tied the Hong Kong and Shanghai markets, later expanding to include bonds, swaps, exchange-traded funds, and wealth products. This reinforced the HKEX’s role as a connector between China and the world, Tong said. “The Hong Kong government also supports the city to develop gold trading, large commodities trading and fixed income trading, which diversifies the local market,” said lawmaker Robert Lee Wai-wang, who is also chairman of Grand Finance Group. “These would provide more opportunities for HKEX and the Hong Kong capital market.”  Preparing for the next 40 years Tong on Thursday announced that HKEX would revamp its HK$6.3 billion headquarters at Exchange Square, adding a new entrance and a new museum near Connect Hall to showcase the history of the local financial market to the public. “At HKEX, while we celebrate 40 years of our modern stock exchange at Exchange Square, we are also busy preparing for the next 40 years and beyond,” he said. “We have ambitious plans to invest in our permanent Exchange Square headquarters by renovating our offices, public-facing areas, and curating a reimagined museum.” There are also plans to renovate Connect Hall, which until 2017 was the trading hall, but is now mainly used for conferences or gong-striking ceremonies for new listings. As the SEHK looks beyond its 40-year history, Wong of Eastspring called for “variety” in listings by including companies from different sectors, which would build resilience amid future sector rotations. Deloitte’s Au suggested the city continue enhancing liquidity, broaden its international investor base, and further strengthen its appeal to innovation-driven and hard-tech companies. “Hong Kong’s next phase of competitiveness will depend on moving beyond being simply an IPO venue,” Au said.</div>

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<p>Marking its 40th anniversary, the Hong Kong Stock Exchange (HKEX) highlights its evolution into a global fundraising hub. Driven by the AI boom and memory chip supercycle, HKEX led worldwide in hi-tech IPOs from July to May, raising $17.44 billion. Despite competition from US and mainland markets, including potential major listings like SpaceX, HKEX proposes reforms to maintain competitiveness. Industry leaders view Hong Kong as a key offshore platform for China's tech sector, supported by strong international investor interest.</p>

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As Hong Kong stock exchange turns 40, can the chip supercycle keep IPOs flowing?