### Western Banks Thrive Despite Geopolitical Tensions Western investment banks have emerged as the main winners of Hong Kong’s strong equity market this year, overcoming the challenges posed by prolonged US-China tensions. The city’s financial activity rebounded significantly, driven by an uptick in equity fundraising through initial public offerings and secondary share placements. ### Leading Roles of Morgan Stanley and Goldman Sachs Morgan Stanley and Goldman Sachs jointly spearheaded many of the year’s largest transactions. According to deal data, Morgan Stanley helped companies raise about $11.6 billion, while Goldman Sachs closely followed with a similar share of total equity issuance on the Hong Kong Stock Exchange. Their expertise and global client network positioned them ahead of both regional and Chinese competitors. ### Revival of Hong Kong as a Regional Hub The resurgence in dealmaking suggests that Hong Kong continues to serve as a vital capital-raising gateway between China and international investors. Despite periodic concerns over political risks, the city’s deep capital markets and liquidity remain unmatched in the region. Analysts see this recovery as evidence that global investors retain confidence in Hong Kong’s role within Asia’s financial landscape. ### Competitive Pressure on Chinese Banks Chinese securities firms, which once surged in market share following Beijing’s push for more domestic participation, now face renewed competition. Western banks have been securing mandates for cross-border listings and sector-focused placements, particularly in technology and consumer goods. > “The market’s momentum has returned,” said one senior Hong Kong-based investment banker, emphasizing that renewed activity indicates growing appetite among institutional investors for Greater China exposure. ### Regulatory and Market Outlook While the US-China strategic rivalry continues, bankers expect the momentum in Hong Kong’s financial markets to persist. The IPO pipeline for early next year remains promising, especially in green energy, healthcare, and consumer sectors. However, stricter global regulations and ongoing geopolitical risks may still influence upcoming valuations and investor confidence. *** *Author’s summary: Western investment banks, led by Morgan Stanley and Goldman Sachs, dominated Hong Kong equity markets in 2025, reaffirming the city’s strength as Asia’s financial bridge despite US-China tensions.*

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Financial Times — 2025-11-30