Much of the attention on Alibaba's snubbing of Hong Kong for its blockbuster listing focused on the regulatory and legal hurdles posed by the e-commerce giant's management structure. But this skirts around a greater challenge faced by the local exchange.
The most pressing question now is whether Hong Kong Exchanges and Clearing can compete with bigger global-oriented bourses that can offer large mainland companies greater market liquidity.
Aside from New York, which snared the Alibaba initial public offering in part due to its massive investor pool, London may emerge as another threat to Hong Kong's bid to shore up its reputation as the main listing destination for big mainland companies.
Global internet companies raised US$1.4 billion on the London Stock Exchange and the city's junior AIM board, a massive jump from a mere US$21 million for the same period last year, according to Dealogic.
Moreover, sentiment in Britain towards high-flying internet stocks is fairly bullish. Shares in AO World, a British online electrical retailer that sells and deliver white goods through its website AO.com  closed more than 30 per cent higher than their offer price on their trading debut last month, after surging as high as 45 per cent.
AO World, which raised US$811 million, delivered the biggest internet offer so far this year.
According to Dealogic, global internet firms have raised a combined US$2.1 billion this year, the highest year-to-date level since 2000, when the tech bubble popped in March 2000. The average deal size of the internet firms has jumped, too - hitting US$188 million, the highest level on record.
These heady sums are fuelling optimism for upcoming internet offerings, including No 2 mainland e-commerce operator JD.com 's US$1.5 billion share sale in the US, where mainland microblogging service Weibo is also heading with a US$500 million deal. Then there is Hong Kong-traded software firm Kingsoft's US$300 million spin-off listing in the US for its security software unit.
Hong Kong, the self-proclaimed capital-raising hub for mainland companies, is looking increasingly under siege from rivals such as New York and London.
Giant state-owned banks and oil majors dominate the city's benchmark index, while technology firms - headlined by computer maker Lenovo and internet conglomerate Tencent - represent only about 7 per cent of the overall market value of the Hang Seng Index. That compares with a 15 per cent representation in the S&P 500 Index in the US.
Hong Kong needs to rethink its position in the global capital market before it's too late. As HKEx chief Charles Li Xiaojia says, we should not be complacent about our prospects.