According to Fortune, Hong Kong Exchanges and Clearing CEO Bonnie Chan warned at the Fortune Global Forum in Riyadh that traditional stock exchanges must band together to remain relevant amid rising competition from cryptocurrencies, private markets, and alternative investments. Chan noted that investor behavior has fundamentally shifted from two decades ago when investors primarily consulted brokers about traditional stocks, to today’s environment where exposure to diverse investment opportunities is readily accessible. Fellow panelists highlighted improving market conditions, with Saudi Tadawul Group CEO Eng. Khalid Abdullah Al Hussan reporting Saudi Arabia’s IPO volume surged from 8-9 annually to 40-45 over three years, while HKEX completed nearly 80 IPOs recently. Chan attributed renewed investor interest to diversification strategies targeting AI, semiconductors, and green technology, plus emerging “new consumption” trends exemplified by Pop Mart’s $40 billion market value from Labubu doll blind boxes.
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The Unbundling of Capital Markets
The fundamental challenge facing traditional stock exchanges goes beyond simple competition—it’s about the fragmentation of capital allocation mechanisms that have defined markets for centuries. When CEOs of major exchanges publicly acknowledge they’re no longer each other’s primary competitors, it signals a profound structural shift. The traditional exchange model, built around centralized price discovery and regulated listings, is being challenged by decentralized finance protocols that operate 24/7 without geographic boundaries. What makes this moment particularly dangerous for established players is that they’re competing against business models with entirely different cost structures, regulatory burdens, and technological capabilities.
Why Collaboration Is Becoming Essential
The push for exchange collaboration represents a strategic pivot from decades of fierce competition for listings and trading volume. We’re likely to see several forms of cooperation emerge: shared technology platforms to reduce development costs, cross-border settlement systems to capture global capital flows, and potentially even joint ventures in emerging areas like digital asset trading. The HKEX itself has experimented with various partnership models, including connecting with mainland China’s markets. However, meaningful collaboration faces significant hurdles—regulatory divergence between jurisdictions, competitive tensions over high-profile listings, and the technical complexity of integrating disparate trading systems across time zones and legal frameworks.
The Cryptocurrency Disruption Factor
While cryptocurrency markets remain volatile and relatively small compared to traditional equity markets, their psychological impact on investor behavior cannot be overstated. The 24/7 trading availability, global accessibility, and perceived decentralization appeal particularly to younger investors who view traditional market hours and geographic restrictions as archaic. More importantly, crypto has normalized the concept of investing outside traditional regulatory frameworks, creating expectations that extend to other asset classes. Traditional exchanges now face pressure to offer similar flexibility while maintaining the regulatory compliance that gives them legitimacy—a difficult balancing act that may require entirely new business units or acquisitions.
Strategic Implications for Market Structure
This collaborative pivot suggests we’re entering an era where exchanges become ecosystem players rather than standalone venues. The most successful exchanges will likely be those that position themselves as hubs connecting multiple asset classes, geographies, and investor types. We may see the emergence of “mega-exchange” networks that offer seamless access to public equities, private company shares, digital assets, and derivatives through unified interfaces. However, this transition carries significant execution risk—technological integration challenges, cultural clashes between traditionally competitive organizations, and the potential for regulatory pushback against consolidated market power. The exchanges that navigate this successfully will likely be those that move beyond viewing collaboration as defensive and instead see it as an offensive strategy to capture the entire investor journey across asset classes.
