HSBC Turned to Asia, Middle East to Meet Growing IPO Demand

HSBC observed a growing interest from Southeast Asian and Chinese companies who wanted to invest in Hong Kong.

The Hong Kong and Shanghai Banking Corporation (HSBC) will expand its investment banking division to meet the increasing demand for initial public offerings (IPOs) from Asian and Middle Eastern companies.

The bank planned to shift its focus to high-return areas, such as Hong Kong and India, and exit low-profit markets, including Europe and the US.

London Stock Exchange Group reports that 27 companies have raised $9.96 billion as of last week, placing Hong Kong at the top of the global IPO table. Similarly, 113 Indian firms have raised $7.71 billion, which puts the National Stock Exchange and the Bombay Stock Exchange in fourth and fifth place, respectively.

David Liao, co-CEO of HSBC for Asia and the Middle East, stated that the company has removed mergers and acquisitions from US and UK markets and wants to redirect its growth to Asian markets.

He added that Hong Kong was a listing market for foreign investors, so the bank decided to increase its capacity to serve the growing population of wealth management clients beyond the 7.5 million residents.

Surendra Rosha, the other co-CEO for Asia and the Middle East, stated that the bank wanted to attract international investors to Indian companies. The bank observed a growing interest from Southeast Asian and Chinese companies who wanted to invest in Hong Kong.

The two co-CEOs are known as “the twins” among their coworkers. They manage the biggest profit center in one of the world’s major banks, with US$6.41 billion in pre-tax earnings in the first three months of 2025, or 68% of the company’s total income. They hold two of the twelve seats on the Group Operating Committee.

HSBC’s expansion of its investment banking division in Asia and the Middle East represents a return to its historical roots.

The bank was founded in Hong Kong in 1865. Its current strategy reconnects with its geographic origins while addressing market realities.

Investment banks like HSBC are finding a niche outside the conventional oil and gas industry due to the changing economic relationship between Asia and the Middle East.

The trade relationships between the Gulf and China will help to surpass Western countries by 2027, with cumulative foreign direct investment (FDI) flows predicted to reach $270 billion over the next decade.

Hang Seng Investment Management, a division of HSBC’s Hang Seng Bank subsidiary, listed the $500 million SAB Invest Hang Seng Hong Kong exchange-traded fund (ETF) on the Saudi exchange in October.

HSBC was also the custodian bank for the Saudi government’s sukuk ETF. It went public in Hong Kong on May 29. A custodian bank is a financial institution that holds and safeguards client assets, like stocks and bonds.

As Saudi is trying to diversify its economy, banks are modifying their service offerings to serve its IT and renewable energy industries, which are crucial for increasing capital in the region.

The largest trade finance bank sees opportunities in Hong Kong and Asia after the US-China trade tensions. The 10 economies of the Association of Southeast Asian Nations (ASEAN) are a potential growth market for them.

With over 600 million people in ASEAN, the tariffs are forcing some economies to rethink how they can cooperate to help businesses and entrepreneurs use this enormous market.

In the first quarter, the bank added 300,000 new customers to its 6 million Hong Kong clients since mainland tourists rushed to Hong Kong to purchase wealth products, insurance, and other assets.

HSBC had big ambitions. It wanted to withdraw from investment banking in the West in the hopes that Asia would source its funds, especially after its diminishing market share in its Western unit.

It was no surprise that HSBC wanted to re-shift its focus. Some people were surprised by its decision to close its mergers and acquisitions advisory and equity capital markets divisions in the UK, Europe, and the US. However, those markets comprised only 0.3% of the bank’s global revenues.