JPMorgan predicts Hong Kong IPO rebound

JPMorgan expects initial public offering activity in Hong Kong and mainland China to increase sharply, with artificial intelligence and healthcare companies likely to lead the next wave of listings, Kevin Foley, the bank’s co-head of global investment banking, said on 21 May. Speaking to Bloomberg’s Haslinda Amin on the sidelines of the JPMorgan Global China Summit, Foley said deal-making had remained resilient globally despite higher interest rates and persistent inflationary pressure.

That matters for companies weighing fundraising plans across Greater China, as well as for investors looking for signs that one of Asia’s most important capital markets is regaining momentum. A stronger listing pipeline in Hong Kong would also be closely watched by banks, advisers and asset managers after a period in which higher financing costs and weaker sentiment made bringing new deals to market more difficult.

Foley’s comments suggest JPMorgan believes the market backdrop is becoming more supportive for equity issuance in the region, even if borrowing costs remain elevated by recent standards. His emphasis on AI and healthcare points to where bankers expect investor demand to be deepest: sectors tied to long-term growth themes rather than cyclical recovery alone. That sits alongside a broader debate over how capital is being allocated across technology and policy-sensitive industries, a theme also visible in recent discussions on AI cooperation at APEC.

Background

JPMorgan is one of the world’s largest investment banks, and its public view on deal activity is watched as a proxy for broader market conditions. Foley’s remarks came at the bank’s China-focused summit, an event that typically brings together executives, investors and policymakers to discuss financing conditions, growth sectors and cross-border capital flows. In saying activity remained strong globally, he indicated that companies have continued to pursue mergers, capital raisings and listings even as central banks have kept rates higher than they were during the era of ultra-cheap money.

For Hong Kong’s stock market, the prospect of stronger IPO issuance carries particular weight. The city has long served as a key venue for Chinese companies seeking access to international capital, while mainland exchanges play a distinct role in domestic fundraising and policy-driven sector support. A pick-up in issuance in both Hong Kong and mainland China would therefore signal not just more corporate confidence, but also a reopening of channels between growth companies and public-market investors.

The sectors Foley highlighted are telling. AI has become a focal point for markets worldwide as companies race to commercialise new tools and infrastructure, while healthcare remains a strategic area because of demographic demand, innovation cycles and state interest in biotech and medical development. Investors have been searching for listings that offer credible growth stories, especially in an environment where high rates can make speculative businesses harder to finance. In that sense, the expected shift echoes the selective appetite seen in other parts of global finance, from bank earnings to equity allocation, including in areas covered by BreakWire’s report on Investec’s record profit and dividend.

JPMorgan sees the next lift in Hong Kong and China listings coming from AI and healthcare, not from a broad-based rush of new deals.

What this means

The immediate implication is that advisers and issuers may begin preparing for a busier second half if market windows open and valuations improve. Companies in AI and healthcare could find themselves at the front of the queue because those sectors have clearer strategic narratives for investors. If JPMorgan’s view proves correct, Hong Kong in particular may benefit from a revival in activity that strengthens fee pools for banks and restores some confidence in its role as a regional listing centre.

Still, Foley’s remarks stop short of declaring a broad-based boom. Higher rates and inflation remain part of the investment landscape, and both can weigh on pricing, demand and post-listing performance. That means any recovery in issuance is likely to be selective, favouring businesses with defensible growth prospects, strong balance sheets and sectors aligned with policy and technology priorities. The same pattern of selectivity has been visible in other markets, including Europe, where investors have rewarded specific stories rather than entire sectors, as seen in Norway’s rally beyond oil majors.

There is also a broader signal here about the durability of capital markets under tighter monetary conditions. For much of the post-pandemic period, bankers and executives questioned whether elevated rates would shut the IPO market for an extended stretch. Foley’s assessment suggests the answer may be more complicated: deals can still happen, but the market is less forgiving and more concentrated around themes that investors believe can grow through inflation and costlier capital. In Asia, that puts AI and healthcare in a privileged position if sentiment holds.

For policymakers and exchange operators, a meaningful rebound in new listings would carry symbolic weight as well as financial value. It would suggest that companies still see public markets as a viable route to expansion and that investors remain willing to back long-term growth stories in China-related markets. That does not erase the structural challenges facing issuers, but it would mark a shift from caution toward measured re-engagement.

What comes next is likely to be judged less by rhetoric than by actual deal calendars. Investors will watch for named IPO candidates in Hong Kong and on mainland exchanges, and for signs that books are being built successfully rather than merely discussed. Attention will also turn to whether AI and healthcare companies can command valuations that justify coming to market while rates remain elevated.

The next test of Foley’s outlook will be the listings that emerge in the months after the JPMorgan Global China Summit. If those sectors begin to produce larger and better-supported offerings, it would strengthen the case that Hong Kong and mainland China are entering a new phase of issuance rather than seeing a short-lived bounce. For banks, issuers and investors alike, that distinction matters.