Securities and Bond Markets
69. In the past year, the securities market continued to flourish. The Hong Kong stock market recorded an average daily turnover of $166.7 billion last year, representing an increase of 29 per cent over 2020. Funds raised through initial public offerings (IPO) in Hong Kong amounted to nearly $330 billion during the same period, making Hong Kong the fourth largest IPO centre in the world. Hong Kong remains a main listing platform worldwide.
70. The increase in trading and market capitalisation of Hong Kong stocks was attributable mainly to the series of reform implemented in the past few years to enhance the competitiveness of the Hong Kong market, including allowing emerging and innovative enterprises with weighted voting rights structure as well as pre‑revenue or pre‑profit biotechnology companies to list in Hong Kong and providing facilitation for qualifying issuers to seek secondary listing in Hong Kong.
71. As at the end of last month, a total of 70 companies have listed in Hong Kong under the new regime, raising more than $570 billion, representing nearly half of the total funds raised during the same period. Currently, the new economy enterprises account for more than 20 per cent of the total market capitalisation in Hong Kong. Among them, 48 are healthcare and biotechnology companies. They have raised over $110 billion in total, turning Hong Kong into Asia's largest and the world's second largest fundraising hub for biotechnology and spurring the rapid and comprehensive development of the biotechnology ecosystem in Hong Kong.
72. Continuous operational enhancement, system reformation and innovative development are important means to empower and accelerate the development of the Hong Kong market. In January this year, after striking a balance amongst considerations such as the need to ensure the quality of listed companies, investor protection and market development, the Hong Kong Exchanges and Clearing Limited (HKEX) launched a listing regime for Special Purpose Acquisition Companies (SPAC), enabling experienced and reputable SPAC promoters to source new and innovative enterprises for merger and acquisition, with a view to assisting emerging enterprises with potential in listing through an unconventional initial offering and providing a new alternative listing route in Hong Kong.
73. Moreover, with the continuous development of the Mainland economy, enterprises have substantial financing needs in the international market. However, due to the increased risks and uncertainties of listing in overseas markets, many China Concept Stock companies have chosen to return. We have already made preparation for their return, including allowing Greater China companies without weighted voting rights structure and which are not from innovative sectors to seek secondary listing in Hong Kong, and offering more flexibility to issuers seeking dual‑primary listings. These measures will help further attract quality China Concept Stock companies to list in Hong Kong and provide more choices for market players, thereby increasing market liquidity and enhancing the competitiveness of Hong Kong as a global financing platform.
74. On market development, considering the fact that there are some large‑scale advanced technology enterprises which require substantial capital for their R&D work but are not qualified for listing as they fail to meet the profit and trading record requirements, the Securities and Futures Commission (SFC) and the HKEX are reviewing the Main Board Listing Rules and, having due regard to the risks involved, examining the revision of the listing requirements to meet the fundraising needs of such enterprises.
75. Bond markets not only facilitate medium and long‑term capital allocation and management, but also guide capital markets with greater depth and breadth towards the role of supporting a real economy. Developing the bond market in Hong Kong has been one of our key objectives in recent years. Apart from promoting the diversification of bond products, we strive to move towards the development direction of financial inclusion, enabling the public to participate and benefit from such inclusion.
76. The Steering Committee on Bond Market Development in Hong Kong, which was set up under my steer last year, has reviewed the current situation of the bond market in Hong Kong and put forward recommendations along three directions, i.e. enhancing market landscape, market infrastructure and market promotion to further promote the development of our bond market. We will progressively implement these recommendations, including expanding the issuance of green bonds, RMB bonds and Hong Kong Dollar bonds with longer tenor under government bond programmes to foster the development of local RMB and green bond markets and the formation of local yield curve; consolidating our strengths in promoting offshore RMB business and encouraging participation of Mainland enterprises and entities in Hong Kong's bond market; and stepping up efforts to promote Hong Kong's position as a bond centre among investors and bond issuers. Meanwhile, we will further enhance the functions of the Central Moneymarkets Unit by upgrading it to be a major central securities depository platform in Asia, while working on the development of an electronic bond trading platform to facilitate secondary transactions and expand investor base. Besides, we will also explore ways to enhance the prospectus requirements and, on the premise of ensuring due protection of investors, make it easier for retail investors to participate in and share the fruits of our bond market development.
77. We have been committed to promoting the development of retail bonds so as to benefit the public. I plan to issue no less than $15 billion of inflation‑linked retail bonds (i.e. iBond) and no less than $35 billion of Silver Bond in the next financial year, with a view to offering members of the public, particularly the elderly, investment options with steady returns. Details of the first batch of retail green bonds for public subscription were announced last week. Members of the public can directly invest in green projects that provide environmental benefits so as to jointly create a green environment for green living in Hong Kong while gaining steady inflation‑linked returns. I plan to continue to issue no less than $10 billion of retail green bonds in the next financial year.
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