Selena Lee and Dorothy Cam
HONG KONG (Reuters) – Hong Kong leader John Lee said on Monday that authorities would take further measures to support the Asian financial hub's securities market, which has been hit by a slowing Chinese economy and geopolitical tensions. He said he is considering it.
The city's economy grew by just 3.2% last year, and capital flight made Hong Kong's stock market the worst performer among major stock indexes last year. India has now overtaken Hong Kong in the value of listed stocks.
Speaking at the first HSBC Global Investment Summit in Hong Kong, Lee said a number of steps have already been taken to strengthen competitiveness, including improving the listing system for specialized technology companies.
“We are pleased that we are considering additional measures, ranging from improving trading mechanisms to strengthening investment services and strengthening market facilitation,” he said, without providing further details.
Hong Kong's Hang Seng Index fell nearly 14% in 2023, marking the fourth consecutive year of decline.
The city, a global capital-raising hub, saw initial public offerings (IPOs) in the first quarter of this year fall 28.5% year-on-year to $507 million, according to LSEG data.
Battling high interest rates, a complex geopolitical environment and a ballooning budget deficit, Hong Kong announced a range of measures in February to attract capital, businesses and tourists back to the city.
Mr Lee said these measures would help Hong Kong get back on its feet.
“Once the measures take hold and the macro environment improves, the stock market will develop sustainably. I have no doubts about that,” he said.
gateway of china
Hong Kong has become an important gateway for investment into mainland China, and Hong Kong and mainland authorities have announced several securities exchange connectivity programs in recent years to deepen investors' access to mutual markets.
According to Hong Kong's Finance Secretary Paul Chan, the Hong Kong government is currently encouraging the mainland to introduce a new Connect program that offers risk management-related financial products.
“Foreign investors investing in the mainland using Hong Kong channels will have more options for risk management,” he said, adding that the new regime is an enhancement to the region's Stock Connect, which was launched a decade ago. Then he added.
The three-day HSBC summit in Hong Kong began on Monday with more than 2,000 participants as authorities try to attract overseas visitors after three years of coronavirus restrictions.
The summit began in the former British colony a day after the Rugby Sevens tournament, one of several high-profile events to take place in the SAR this year.
These events come against a backdrop of concerns expressed by some lobby groups and diplomats about the uncertain prospects for political and civil liberties after China implemented a sweeping national security law in 2020.
Hong Kong's prospects as a financial center are crucial for London-based HSBC, which makes most of its profits from the city where its shares are listed and is also the bank's regional headquarters.
HSBC Chairman Mark Tucker said Hong Kong would continue to play its role as an international financial center due to its vast capital markets, strong commitment to common law institutions and a “robust” US dollar peg.
(Reporting by Selena Li and Dorothy Kam; Editing by Sumeet Chatterjee and Stephen Coates)
