Published: 21:17, June 14, 2023 | Updated: 13:03, June 15, 2023
HKEX's superconnector role reemerges
By Oswald Chan

(Front row, from left) Acting Chief Executive Officer of the Securities and Futures Commission (SFC) Rico Leung, Chairman of the SFC Tim Lui Tim Lui Tim-leung, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, Commissioner of the Ministry of Foreign Affairs of the People's Republic of China in the Hong Kong Special Administrative Region Liu Guangyuan, Chairman of the HKEX Laura Cha Shih May-lung, Financial Secretary Paul Chan Mo-po, Chief Executive Officer of the HKEX Nicolas Aguzin, Chief Executive of the Hong Kong Monetary Authority Eddie Yue Wai-man, Permanent Secretary for Financial Services and the Treasury (Financial Services) Salina Yan Mei-mei, and other guests at the ceremony pose for photo at the Hong Kong Stock Exchange on June 14, 2023. (PHOTO / HKSAR GOVERNMENT)

The Hong Kong Stock Exchange is set to resume its superconnector role between the capital markets of the Chinese mainland and overseas countries amid the Hong Kong Special Administrative Region’s reopening to the outside world, government officials and business leaders said Wednesday.

Financial Secretary Paul Chan Mo-po; Liu Guangyuan, head of the Commissioner’s Office of China’s Foreign Ministry in the Hong Kong SAR; Yin Zonghua, deputy director of the Liaison Office of the Central People’s Government in the HKSAR; and other government officials and business leaders attended Wednesday’s gong-strike ceremony to celebrate the 23th anniversary of the listing of Hong Kong Exchanges and Clearing Ltd.

Chan also said that the average daily turnover of Hong Kong stock market has also reached new heights, from HK$88 billion ($11.24 billion) in 2017 to HK$125 billion in 2022

“For so many years, the HKEX has been the government’s staunch partner, being an active contributor, participant and witness to the successful development of Hong Kong as an international financial center,” Chan said at the ceremony.

The finance chief said that since the HKEX’s listing-regime reform in 2018, which allowed the listing of new-economy companies with a weighted voting rights structure, there are now 250 such companies listed on the bourse. “Although they constitute just 10 percent of the number of listed companies in Hong Kong, their market capitalization and average daily turnover both stand at around 25 percent of our market.”

Chan also said that the average daily turnover of Hong Kong stock market has also reached new heights, from HK$88 billion ($11.24 billion) in 2017 to HK$125 billion in 2022.

Looking ahead, the government will work with HKEX to position Hong Kong as a leading global green technology and green finance center, and further strengthen Hong Kong’s role as the offshore renminbi business hub.

“Next, we will press ahead with the inclusion of renminbi-denominated securities under the Southbound Connect, so that mainland investors can trade Hong Kong shares with their onshore renminbi,” Chan said.

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HKEX Chairman Laura Cha Shih May-lung said that the number of companies listed on the Hong Kong Stock Exchange has increased from the initial 800 to nearly 2,600, and the total market value has increased from less than HK$5 trillion to more than HK$35 trillion.

That is equivalent to 13 times of Hong Kong’s gross domestic product. Back in 1997, the figure was just two times bigger, according to government data.

More than 65 percent of the funds raised by IPOs last year came from new-economy companies, Cha said, adding that HKEX will continue to embrace major investment trends and exploring new asset classes such as ESG (environmental, social, and governance) investments.

Cha also said that “the Hong Kong Dollar — Renminbi Dual Counter Model, which will be launched next week, will help ensure the linkage to connect mainland and international investors,” and she added that two-way capital flow will help business growth and diversification of the HKEX business group.

The HKEX chairman added that the business group will continue to innovate, and continue to explore and introduce more new products in categories such as data and ESG products, in a bid to cement Hong Kong as a trading hub of exchange-traded funds and derivatives products in Asia.

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HKEX CEO Nicolas Aguzin said, “Hong Kong has the unique advantage of connecting the mainland and international markets, and the Hong Kong Stock Exchange recently has made many business promotions in overseas markets, and we are confident in expanding to the international market.”