Global Market: Profit-booking fears rise as Hong Kong's hottest IPOs face lock-up expiry

Hong Kong equity market is bracing for an unprecedented wave of IPO lock-up expirations, with shares worth an estimated $274 billion set to become eligible for trading over the next 12 months, the largest volume on record according to Goldman Sachs. High-profile names facing expiries include Chinese AI firm Knowledge Atlas Technology (about 6% of outstanding stock), MiniMax (about 45% of outstanding shares), and Shanghai Iluvatar CoreX Semiconductor (about 4.3% of shares). The Hang Seng Index has already declined 8.9% year-to-date, while Hong Kong IPOs delivered an average first-day return of 61% in H1 2026, raising fears of intensified profit-booking. Morgan Stanley expects secondary selling pressure to be particularly intense between July and September, with historical data suggesting share prices typically fall 4-7% within three to six months after such expirations.