Financial Secretary Paul Chan Mo-po (center) attends Wealth Management Summit 2023 organized by Private Wealth Management Association on Oct 6, 2023. (PHOTO PROVIDED TO CHINA DAILY)

Financial Secretary Paul Chan Mo-po said the task force on enhancing stock market liquidity will submit its report to the government regarding how to boost trading liquidity of Hong Kong stock market very soon.

The finance chief was speaking at the Wealth Management Summit 2023 organized by Private Wealth Management Association (PWMA) in Hong Kong on Friday.

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Chan emphasized that the government of Hong Kong Special Administrative Region has been working hard to enhance the competitiveness of the city’s listing platform over the past few years.

“The task force will review the listing regime and the market's structure and trading mechanisms. It will also explore how to broaden fund flows, attract more quality enterprises to list in Hong Kong, promote product innovation and diversity, and enhance price discovery and trading efficiency,” Chan said at the PWMA summit.

As Hong Kong offers a much larger liquidity base, Maynard (head of equities at China Renaissance Securities) thinks it makes more sense for HKEX to cultivate direct relationships with bourses in the United States and Europe as well as some larger Asian stock markets that can offer greater attraction for Hong Kong and Chinese mainland investors

The task force was set up in August, with the aim of reviewing factors affecting stock market liquidity comprehensively and making improvement proposals to the chief executive. The task force comprises members from the financial services sector, relevant government officials, as well as representatives from financial regulators and the Hong Kong Exchanges and Clearing (HKEX).

“Market liquidity is very important to the future of the Hong Kong stock market. Currently, about 15 percent of trading volume comes from mainland investors. If mainland investors can trade Hong Kong stocks in renminbi through the stock connect programs, it will help stimulate them to participate more in Hong Kong stock-trading,” HKEX Chief Executive Officer Nicolas Aguzin said at the summit.

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The bourse CEO said about 50 new companies listed their shares this year, which is better than some exchanges in Asia.

“HKEX needs to promote to the world that it can provide better price-discovery, single-market volatility hedging, and round-the-clock trading,” said Andy Maynard, head of equities at China Renaissance Securities.

As Hong Kong offers a much larger liquidity base, Maynard thinks it makes more sense for HKEX to cultivate direct relationships with bourses in the United States and Europe as well as some larger Asian stock markets that can offer greater attraction for Hong Kong and Chinese mainland investors.

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Ike Song Yang, managing director at China Renaissance, noted that getting more overseas companies listed on the Hong Kong stock exchange, for example ASEAN companies, can attract more investors and increase trading volume; reduce concentration risk by diversifying the current reliance on mainland companies; and solidify HKEX’s top position in Asia region.

Meanwhile, media reports said that the administration is speeding up its study of the arrangements of the Hong Kong stock market to continue operation during extreme weather. The relevant working group will submit a feasible plan in the next few weeks.

HKEX responded that it is currently actively working with the government and regulatory agencies to study the arrangements, emphasizing that the safety of personnel remains the most important consideration of the exchange, and the bourse will announce the latest progress to the market in due course.