Goldman Sachs: Hong Kong Stock Market Expected to Face Over 2 Trillion Hong Kong Dollars in Unlock Waves

Odaily reports that Goldman Sachs stated, as IPO lock-up periods gradually expire, the Hong Kong stock market may face approximately $274 billion (approximately HK$2.13 trillion) in new share supply over the next 12 months. It is anticipated that robust equity demand will be able to absorb this influx of supply. Goldman Sachs' report indicates that dual demand from passive index funds and southbound capital constitutes a significant liquidity buffer, effectively mitigating the selling pressure triggered by the expiration of lock-up shares.

Historical data suggests that within 3 to 6 months following the unlock, stock prices typically experience a modest decline of 4% to 7%, with significant divergence in returns. The short-term performance after the unlock is primarily determined by the ratio of unlocked shares to total share capital, while medium-term returns are structurally driven by the post-unlock free float ratio and the stock's performance prior to the unlock. Companies with a high proportion of cornerstone investors, especially domestic cornerstone investors, tend to face greater selling pressure after their lock-up shares expire. (Jin Shi)