Goldman Sachs: Hong Kong Stock Market Expected to See Over 2 Trillion Hong Kong Dollars in Lockup Expirations

According to Odaily, Goldman Sachs stated that with the gradual expiration of IPO lock-up periods, the Hong Kong market may face an additional supply of approximately 274 billion USD (about 2.13 trillion HKD) over the next 12 months. The bank expects strong equity demand to absorb this influx of supply. Goldman Sachs' report noted that dual demand from passive index funds and southbound capital flows acts as a significant liquidity buffer, effectively mitigating selling pressure from the expiration of locked-up shares.

Historical experience shows that within 3 to 6 months after lock-ups expire, stock prices typically experience a moderate decline of 4% to 7%, while returns show significant divergence. Short-term performance after the lock-up expiration is primarily determined by the proportion of unlocked shares relative to total share capital, whereas mid-term returns are structurally driven by the proportion of freely floating shares after unlocking and the stock's performance before the lock-up expirations. Companies with a higher proportion of cornerstone investments, especially from domestic cornerstone investors, tend to face greater selling pressure after their locked-up shares unlock. (Jin Shi)