Hong Kong is trying to improve the competitiveness and liquidity of its local stock market and attract more family offices to the territory.
On Monday, Hong Kong chief executive John Lee emphasised the strengths of Hong Kong’s status as an international financial centre, which acts as a “super-connector between mainland China and the rest of the world”.
“Thanks to the ‘One Country, Two Systems, Hong Kong seamlessly connects companies and people from around the world with mainland China,” Lee told delegates at the inaugural HSBC Global Investment Summit in the SAR on 8 April.
“The principle ensures the continuous growth Hong Kong’s long-standing institutional strengths, from the rule of law [and an independent judiciary] to the free flow of capital, people and information, as well as a low and simple tax regime,” he added, amid concerns about the stock market’s volatility.
Lee highlighted recent measures such as reducing the stamp duty on stock transfers and streamlining the listing process.
The Hang Seng Index fell 13.8% last year, and last month Hong Kong’s government imposed a new, controversial National Security Law.
Yet, Lee said that there are now 2,700 family offices in Hong Kong, which generates a multiplier effect on the city’s economy. He is keen to attract more, as the development of the wealth management industry is among the government’s policy priorities.
Lee’s message was reinforced by Paul Chan, Hong Kong’s financial secretary, who highlighted city’s mutual market access schemes, green and sustainable development initiatives (such as opening the green bond market to retail investors), innovations in fintech and opportunities in wealth management.
He said that Hong Kong is discussing a new connect scheme with mainland regulators, which would allow investors to trade risk management-related financial products.
“Foreign investors using channels in Hong Kong to invest in the mainland would have more options to manage risks,” he said, adding that the new scheme will improve the territory’s Stock Connect which was launched a decade ago.
Connect schemes have been the main official channels for foreign investors to invest in Shanghai and Shenzhen markets and for mainland Chinese to buy Hong Kong stocks.
Chan added that Hong Kong is negotiating to include renminbi-settled stocks into the southbound connect, which should offer more choices for mainland investors and boost market liquidity.
“As the measures take hold and the macro environment improves, so too will be the sustainable development of the Hong Kong stock market,” concluded Lee.
*Photo courtesy of HSBC Global Investment Summit
