Morgan Stanley, Goldman Sachs and other investment banks warn of increasing selling pressure in Hong Kong stocks.

Golden Finance reported that on July 6, Hong Kong has seen multiple new stocks listed over the past year. As locked-up shares gradually become unlocked, an unprecedented wave of lock-up expirations is approaching. Brokerages believe this could add selling pressure to the already struggling Hong Kong stock market.

Zhipu (2513.HK) will see 25.6 million shares end their six-month cornerstone investor lock-up period on Wednesday, accounting for nearly 6% of its total issued shares. The stock price has surged more than 12 times since its listing. MiniMax (0100.HK) and Tianshu Zhixin (9903.HK) also face lock-up expirations this week, with shares equivalent to 45% and 4.3% of their total issued shares unlocking, respectively.

A Morgan Stanley report pointed out that secondary market selling pressure will be concentrated mainly in July and September. Even if company fundamentals remain solid, these lock-up expiration events could pose a drag on market liquidity. This is also one of the key reasons the bank remains cautious on the Hong Kong market in the short term.

Goldman Sachs previously estimated that over the next 12 months, $274 billion (approximately HK$2.14 trillion) worth of locked-up shares will expire in the Hong Kong market, a record high. Based on historical experience, stocks typically fall 4% to 7% within three to six months after lock-up expirations.

The stellar returns of new stocks may further intensify profit-taking pressure. EY data shows that the average first-day gain for Hong Kong IPOs in the first half of this year was 61%, while the broader market has been relatively sluggish. The Hang Seng Index has fallen 8.9% so far this year.