Goldman Sachs: Hong Kong Stock Market Expected to Face Over $2 Trillion Unlocking Wave

Odaily Planet Daily News – Goldman Sachs stated that as IPO lock-up periods gradually expire, the Hong Kong market could see approximately $274 billion (around HK$2.13 trillion) in additional share supply over the next 12 months. It is expected that strong stock demand will absorb this influx of supply. The Goldman Sachs report highlighted that dual demand from passive index funds and southbound capital provides a significant liquidity buffer, effectively mitigating the selling pressure caused by the unlocking of restricted shares. Historical data indicates that stock prices typically experience a moderate decline of 4% to 7% within 3 to 6 months after unlocking, with significant divergence in returns. The short-term performance post-unlocking is primarily determined by the proportion of unlocked shares relative to total share capital, while mid-term returns are structurally driven by the proportion of freely tradable shares after unlocking and the stock's performance prior to unlocking. Companies with a high proportion of cornerstone holdings, particularly those held by domestic cornerstone investors, often face greater selling pressure after the lock-up period ends. (Jin10)