Is there light at the end of the tunnel for Hong Kong?

livemint.com:

Hong Kong’s stock market used to be the world’s top equity fundraising venue. Not anymore: In the number one spot as recently as 2019, it didn’t even break the top five in 2023 according to Dealogic. But the market is up 6% this week, its best performance this year, in the wake of proposed regulatory changes.

In particular, comments from China’s security regulator suggesting that more big Chinese companies may be greenlighted to list in Hong Kong. That would be welcome news—but it is probably not enough to save the patient. A durable recovery for Hong Kong’s embattled banking sector still awaits a sea change in investors’ attitude toward Chinese stocks more broadly.

Last week, Chinese securities regulators announced five measures specifically to support Hong Kong’s financial markets. Some, such as expanding the universe of instruments that mainland Chinese investors can buy through a trading link with Hong Kong called Stock Connect, would boost inflows from the north, even if they are not enough to lift the whole market. What is particularly music to the ears of the city’s suffering bankers, however, is that China will support more “leading companies" to go public in Hong Kong.

It is unclear what concrete steps Beijing will take to make this happen—and some of the largest Chinese companies are already listed in Hong Kong. But the market cheered the news anyway: This week’s rally brought the benchmark Hang Seng Index to its highest level this year. That help is very much needed.