Goldman Sachs: Hong Kong Market Expected to Face Over 2 Trillion HKD Lock-Up Expiration Wave

Odaily Planet Daily News Goldman Sachs stated that with the gradual expiration of IPO lock-up periods, the Hong Kong stock market may face an additional supply of approximately $274 billion (about HK$2.13 trillion) over the next 12 months. The firm expects strong stock demand to absorb this incoming supply. The Goldman Sachs report pointed out that dual demand from passive index funds and southbound capital constitutes an important liquidity buffer, effectively alleviating selling pressure from the expiration of locked-up shares.

Historical experience shows that within 3 to 6 months after the lock-up expiration, stock prices typically experience a moderate decline of 4% to 7%, with a wide divergence in returns. Short-term performance post-expiration 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 floating shares after expiration and the stock's performance before the lock-up expiry. Companies with a high proportion of cornerstone holdings, especially from domestic cornerstone investors, tend to face greater selling pressure after the lock-up shares expire. (Jin Shi)