Hong Kong firms rush to issue convertibles – and trend could continue, bankers say

A growing number of Hong Kong-listed companies are tapping strong equity market sentiment to issue convertible bonds, a trend bankers expect to continue.Eleven companies raised US$7.4 billion through convertible bonds in the first five weeks of 2026, about 47 per cent of last year’s US$16 billion total, according to Dealogic.Tianqi Lithium, one of the world’s largest producers of lithium-ion battery materials, announced on Wednesday that it would raise about HK$5.9 billion (US$755 million) from a combination of share placement and a convertible bond. That came a day after leading Chinese broker Huatai Securities said it would raise HK$10 billion through a convertible bond. Earlier, Chinese sportswear group Xtep said it would issue HK$500 million in convertible bonds to institutional investors.“The volume has been pretty crazy since the beginning of January,” said Olivia Li, who leads the Greater China equity-linked business at Citi.The number of companies rushing to issue convertible bonds was growing and bankers were busy with deals even as the Lunar New Year approached, market players said.“The key reason is that the equity market has started pretty strong this year,” said Li. “So everyone is trying to take advantage of the current high share prices to raise money by issuing equity-linked instruments, such as convertible bonds.”Convertible bonds are securities that can be converted into shares at a predetermined price, typically set at a premium to the current share price. When share prices are high, issuers can fix a higher conversion price, and investors gain more confidence that the stock will rise enough to make conversion worthwhile.