CPA Australia Survey: Hong Kong’s capital market key to sustaining international competitiveness amid conservative businesses outlook for 2026

(from left to right) Mr Cliff Ip, Divisional Councillor of CPA Australia 2025 in Greater China; Mr Cyrus Cheung, Divisional Deputy President of CPA Australia 2025 in Greater China; Ms Karina Wong Divisional President of CPA Australia 2025 in Greater China; Mr Kelvin Leung, Divisional Deputy President of CPA Australia 2025 in Greater China

They are most likely to cite a competitive tax system (39 per cent), robust capital market (30 per cent) and the Chinese mainland's economic performance (24 per cent) as the main drivers of growth.

However, respondents identified high living costs (28 per cent), a weakening global economy (27 per cent) and slowing mainland growth (26 per cent) as the biggest expected challenges for Hong Kong's economy and businesses in 2026.

Further, property price forecasts for next year are subdued, with more than three-fifths expecting retail, industrial and office prices to decline, while residential outlook is somewhat better, but still mixed. Encouragingly, 42 per cent rate the city's international competitiveness as extremely high or fairly high.

Hong Kong's IPO market staged a remarkable rebound this year, reclaiming its position as the world's top fundraising hub by the third quarter. Looking ahead, 66 per cent of respondents expect IPO activity to rise further in 2026. 'Enhancing Hong Kong's financial connectivity with other regions' were cited by 22 per cent of respondents as the most beneficial government policy for their organisation next year, followed closely by China's 'Going Out' strategy (21 per cent).

Ms Karina Wong, CPA Australia's Greater China Divisional President for 2025, said: "Hong Kong's capital market is a vital engine for the city's economic growth and a key differentiator in sustaining global competitiveness. Amid geopolitical tensions and external volatility, Hong Kong is considered as a safe haven for international investors and businesses to manage their assets and diversify risks.

"Our survey shows that enhancing financial connectivity with other regions is the policy most likely to have the greatest impact on business growth next year. To maintain this edge, the Hong Kong government and regulators should consider implementing an IPO Connect scheme to allow Mainland investors to participate in Hong Kong IPOs, attract more family offices to boost liquidity and retain wealth in the city, and streamline the listing process for Mainland companies. They should also keep building connections with overseas financial markets and attracting global investors to the city."

Trade tensions continue to weigh heavily on business sentiment, with 51 per cent reporting it having negative impacts on their company's performance in 2025. Further, the proportion citing it as a key business concern in the next year has more than doubled from 9 per cent last survey to 20 per cent for 2026.

Hong Kong companies have responded proactively to this challenge, with 24 per cent relocating or restructuring their operations, 20 per cent expanding into new markets and 19 per cent conducting risk assessments. Expansion strategies are increasingly focused on domestic (32 per cent) and Chinese mainland markets (46 per cent).

Revenue expectations are more conservative for next year, with 39 per cent of respondents forecasting their company's revenue will grow in 2026, down from 51 per cent in 2025, while 37 per cent expect it to remain stable. Competitive pressures are intensifying, with 29 per cent citing it as their top challenge, up from 19 per cent. Cost management (43 per cent) remains the leading strategic priority for surveyed companies for the third consecutive year.

Ms Wong said: "Companies are adopting a more cautious approach for 2026 in response to heightened external volatility. While uncertainties persist, Hong Kong continues to offer many promising opportunities, such as a buoyant stock market, a revitalised tourism sector and many successful mega-events. Many organisations are prioritising local prospects as a prudent strategy.

"Strengthening the city's position as the premier gateway for Chinese enterprises under the Mainland's 'Going Out' strategy will reinforce its role as a unique connector to global markets. At the same time, supporting SMEs adopt AI-driven tools to improve productivity and cost management will ensure businesses remain agile and competitive.

"Companies should leverage opportunities from China's 'Going Out' strategy, seek professional advice to manage financing and borrowing costs and innovate to generate new customer demand. Reducing operating costs through outsourcing non-core functions and tapping into government support schemes to diversify into new markets will be essential for navigating 2026."

The survey was conducted from 22 October to 21 November 2025, capturing insights from 296 accounting and finance professionals across diverse industries. More than half of respondents are executives and managers, with representation from firms of all sizes.

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References

1. ^{^} Media OutReach Newswire (www.media-outreach.com)