“Only a fraction [of mainland Chinese investors] has opened accounts and actively trade Hong Kong stocks. But when I look at the pattern of those already participating in the Hong Kong market, I can see they are exploring more diversified opportunities,” Chan says in an interview with The Edge Malaysia in Kuala Lumpur.
“There are over 5,000 listed stocks in [mainland] China, we have over 2,700 stocks in Hong Kong but many of them are still China businesses. China is doing great, but you also want to hedge a little [beyond] Chinese businesses that are also expanding overseas.”
She notes the strong appetite for structured products resulting from a 2023 collaboration with the Saudi Tadawul Group, Saudi Arabia’s stock exchange operator, which facilitated the listing of reciprocal listed exchange-traded funds (ETFs) in both countries.
“The Saudi-facing [ETF], which is listed on the Hong Kong Exchange … is by far more popular. A lot of investors have no exposure to the Middle East, and if they can invest in a Hong Kong-listed ETF, and get exposure to Saudi Arabia, that is good, right? Because they know how to invest in Hong Kong-listed securities. And there are many Chinese [trading] accounts looking to expand [investments] beyond Hong Kong,” Chan elaborates, expressing confidence that there will be similar success as a result of HKEX’s collaboration with Bursa Malaysia.
See also: Hong Kong airport taps local debt boom with US$1.9 bil plan — Bloomberg
On March 27, HKEX and Bursa Malaysia unveiled in Hong Kong the HKEX Bursa Malaysia Large Cap Index (HKEXBML), their first co-branded benchmark — featuring 30 Malaysian blue chips and 30 Hong Kong Southbound Connect-eligible large-cap companies — that they say is “designed to strengthen Malaysia-Hong Kong capital market integration and support future cross-market investment opportunities, including products such as ETFs”. The index, with 60% Hong Kong and 40% Malaysia country weightage, and 12% single stock cap, provides a cross-market benchmark that is eligible for inclusion in Southbound ETF Connect. Simulated or back-tested data shows the index recording a one-year return of 23.5% with 3.5% dividend yield.
Liquidity from mainland China
The Southbound Connect scheme allows eligible mainland Chinese investors to trade Hong Kong-listed stocks via partnerships between HKEX and the Shanghai and Shenzhen stock exchanges.
See also: MTR raises US$2.4 bil from first public Hong Kong dollar bonds
Southbound Stock Connect, which included 564 stocks and 23 ETFs as at the end of 2025, constitutes around 25% of Hong Kong’s cash market trading currently, rising from 14.8% in 2023 to 18.3% in 2024 and 24.2% in 2025.
Average daily turnover (ADT) for Southbound Stock Connect reached HK$121.1 billion ($19.8 billion) in 2025, more than double the HK$48.2 billion in 2024, according to HKEX data. Meanwhile, Southbound ETF turnover reached HK$3.9 billion, up 61.7% year on year.
“Expanding our engagement with the region is a key strategic priority as we continue our work to build a multi-asset product ecosystem, drawing global liquidity to Asia at a time of heightened macro uncertainties,” Chan says, reiterating HKEX’s exclusive connectivity to mainland Chinese investors and the common goal of enhancing regional connectivity through mutually beneficial initiatives with tangible outcomes.
Later on March 27, Chan signed a MOU with Bursa Malaysia CEO Fad’l Mohamed, which will see the two exchange operators collaborating in five strategic areas towards “the development of more connected and investable markets” — including through streamlined pathways for dual listings between Hong Kong and Malaysia; the co-development of market-driven indices; enhanced access and co-promotion of ETFs; the facilitation of shariah-compliant securities in both markets; and carbon markets-related collaborations.
Facilitating dual listings
Capital A could well be an early beneficiary as HKEX and Bursa Malaysia work on making dual listings easier between Hong Kong and Malaysia. Capital A founder and CEO Tony Fernandes on March 30 said bankers had been hired to work on possibly dual-listing Capital A in Hong Kong by the middle of this year.
Malaysia, Chan says, “sits at the heart of Southeast Asia — one of the world’s fastest growing regions — known for exciting opportunities in sectors such as innovation, consumer and resources”. She also notes Malaysia’s deep knowledge in shariah-compliant products as another potential area for joint collaborations, and congratulates her Malaysian counterpart on the successful listing of Sunway Healthcare on Bursa Malaysia’s Main Market on March 18.
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Sunway Group founder and chairman Jeffery Cheah told reporters that day that Sunway Healthcare had been approached for a dual listing by both HKEX and the Singapore Exchange (SGX) but there is “no fixed timeline for now” to proceed.
Yet, investors looking at Hong Kong should soon have indirect access to Sunway Healthcare, which is among 31 Malaysian-listed constituents on the newly launched HKEX-BM Index that is supposed to be equally represented by 30 Malaysia and 30 Hong Kong stocks, Bloomberg data shows.
It is understood that the index will revert to the intended 30 Malaysian stocks at the next semi-annual review in June. Sunway Healthcare, which was spun off from Sunway, replaced QL Resources on the 30-constituent FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI). However, Genting, which is not an FBM KLCI constituent, currently has the smallest market capitalisation among the 31 Malaysia-listed HKEX-BM Index members.
Eyeing HK-listed Malaysia-facing ETF
Chan hopes an ETF can be launched based on the HKEXBML within six months and be eligible for Southbound Connect flow one year from now.
Fad’l told reporters that Bursa Malaysia’s latest partnership with HKEX places stronger emphasis on product development while the CNI-Bursa Malaysia 50 Index, launched with the Shenzhen Stock Exchange following an MOU in December 2020, was more for “profiling” or to raise awareness on the companies.
Notably, HKEX launched Asia-Pacific’s first ETF that tracks Saudi Arabian equities — the CSOP Saudi Arabia ETF — in November 2023, nine months after signing an MOU with the Saudi Tadawul Group. The ETF’s constituents include Saudi Arabia’s national oil company, Saudi Aramco, which reportedly considered HKEX as among potential initial public offering (IPO) destinations but eventually opted to list at home in Riyadh’s Tadawul. Currently the world’s largest IPO to date, Saudi Aramco raised US$25.6 billion ($32.8 billion) with the sale of a 1.5% stake in December 2019.
Saudi Aramco’s market capitalisation stood at US$1.75 trillion, making it the world’s sixth largest listed company by market capitalisation after Nvidia Corp (US$4.2 trillion), Apple Inc (US$3.64 trillion), Alphabet Inc (US$3.63 trillion), Microsoft Corp (US$2.8 trillion) and Amazon.Com Inc (US$2.2 trillion), according to Bloomberg data on March 30.
Elon Musk’s SpaceX, however, is reportedly mulling a record-breaking IPO by his 55th birthday on June 28, which sources say would raise US$75 billion and value it above US$1.75 trillion. SpaceX is seen as a beneficiary of Nasdaq rule changes that make it faster and easier for certain newly listed companies to join the Nasdaq 100 Index of largest US tech stocks.
‘Global push, China pull’
Without specific reference to any potential IPOs, Chan says HKEX is continuously working towards making processes more efficient and ensuring that listing rules keep up with changing market needs to continuously present investors with attractive IPOs and structured products. In 2024, Hong Kong’s Securities and Futures Commission (SFC) and HKEX unveiled accelerated IPO application processes for certain types of companies.
She concurs that the desire to keep the IPO pipeline strong should not come at the expense of IPO quality. “We remind them that quality is very important.”
“The purpose of an exchange is to match capital with opportunities. If there is a lot of appetite for capital, I will not say I have enough [IPOs], too much traffic and therefore turn people away, but [instead] build bigger networks so that I can accommodate more. I think that is the essence of being an infrastructure player [platform provider],” Chan says, putting emphasis on continuous improvements.
“Right now, in front of me, I see a very strong emerging trend, what I call the global push and the China pull. Global investors are pushing capital into Asia as a whole, which is very good, so we should focus on grabbing that [capital flow]. We are reminding sponsors in Hong Kong to keep up the quality because we are conscious that the jump [in IPO pipeline] is very phenomenal right now … to do all these IPOs, we need a lot of bandwidth — bankers, lawyers, accountants. We want to make sure that the market does not cut corners and sacrifice quality for quantity,” Chan says of Hong Kong financial market regulators’ recent warning to investment bankers against filing “sloppy” IPO applications. In March, China Securities Regulatory Commission (CSRC) reportedly blocked “low-quality” Chinese companies with opaque offshore structures from listing in Hong Kong.
With “way above 200 companies” in its IPO pipeline, HKEX looks set for a busy 2026, even though it might be harder to retain its 2025 position as the world’s largest IPO market due to the size of Nasdaq’s upcoming SpaceX mega IPO.
As at April 1, HKEX had welcomed 40 new listings, raising HK$110 billion (RM56.72 billion) year to date. In comparison, Bursa Malaysia is targeting total IPO market capitalisation of RM28 billion this year, up from RM27.4 billion in 2025.
Last year, HKEX’s IPO tally was bolstered by Shenzhen-listed Chinese battery giant Contemporary Amperex Technology (CATL), which raised HK$35.7 billion when it listed in Hong Kong last May. Kuwait’s sovereign wealth fund was among key cornerstone investors, attesting to strong appetite for good Hong Kong IPOs, Chan says.
To date, 103 Asean companies have collectively raised over US$3 billion by listing on HKEX, with 61 companies (or 59%) from Singapore, followed by 30 (29.1%) from Malaysia and five (4.9%) from Indonesia.
Index-tracking capital flows
While acknowledging that stock exchange operators compete for IPOs at certain levels, Chan says there is ample opportunity for strategic “win-win” partnerships and joint product development and promotion, such as its collaboration with the Saudi stock exchange and Bursa Malaysia.
“I don’t remember [who approached who],” Chan says when asked how the HKEX-Bursa Malaysia collaboration came about. Stock exchange operators often meet and exchange notes, she says, noting that HKEX will host the 40th Asian and Oceanic Stock Exchange Federation (AOSEF) general assembly and 31st working committee meeting in Hong Kong on April 22.
Rather than stock exchange operators wanting more control over what goes into a benchmark index, Chan says the desire for greater timeliness in catering to investors’ evolving appetites is HKEX’s motivation behind creating new products. These products include new indices like HKEXBML with Bursa Malaysia — independent of influential global stock market benchmark index providers like MSCI, whose decisions can trigger massive capital flows, as witnessed by the recent Jakarta market rout following its recent warning on Indonesia’s long-standing low free float issue.
“As an exchange, we are looking at the market every day, every second … Therefore, we have a very good understanding of the appetite of investors, what they are seeking. Naturally, we can work out what index we should be compiling … So I think it is very natural to want to have our index business. It will put us in a position where we can be quicker in reacting to investors’ demands [and] changing market dynamics,” Chan says, pointing to the HKEX Tech 100 Index, which is designed to measure the performance of the largest Hong Kong-listed companies with high exposure to key technology themes that are eligible for Southbound Stock Connect.
“Once we put up an index, we can continue with constructing more products — not just ETFs, it could be futures, options based on an index,” she says, stressing the importance of continuous product development despite having a strong IPO pipeline.
Incidentally, three days after signing the MOU with HKEX, Bursa Malaysia and FTSE Russell issued a consultation paper seeking market feedback on proposed enhancements to the methodologies of the FBM KLCI and FTSE Bursa Malaysia Mid 70 Index (FBM70), which may well reflect the desire to improve the index’ appeal to investors (see sidebar).
The SGX — which saw the most IPO fundraising in Southeast Asia in 2025 even though it only had 13 IPOs compared with Bursa Malaysia’s 60 — in January announced a partnership with Nasdaq to jointly draw listings by creating a Global Listing Board by mid-2026, which would allow high-growth companies with at least $2 billion in market capitalisation to list on both exchanges with a single prospectus. It remains to be seen if that puts SGX as a front runner for additional listings by SpaceX.
Rather than naming a rival, Chan says HKEX’s focus is on improving its capacity to deliver what the market needs. “I take the view that there is enough for everyone to partake in. It is more competing on who has a more efficient platform [because] investors want to deploy capital and there has to be turnover as money does not just get trapped in an exchange.”
Whether it is competing for IPOs or capital flows, Chan says stock exchanges always need to be conscious of the needs of companies seeking to raise capital and investors seeking returns. “We [stock exchanges] can all compete but [ultimately] it has to make sense from their perspective.”
This story first appeared in the March 30 issue of The Edge Malaysia
