Hong Kong IPOs raise over $82.8bn after national security law: finance chief

HKEX file photo

Hong Kong’s national security law, which came into force on June 30, 2020 following protracted social unrest the previous year, has further cemented the city’s role as an international financial hub, Secretary Paul Chan finance from the Hong Kong Special Administrative Region (HKSAR), said on Sunday.

Writing on his weekly blog, Chan said the law had restored stability and security to the city after the 2019 social unrest, and people’s rights and freedoms were now better protected.

“The numbers say it all. IPO funds raised in Hong Kong have exceeded HK$650 billion ($82.8 billion) since the law was implemented, representing an increase of more than 30% from the same period before the enactment of the law,” he said. wrote.

Average daily turnover in the local stock market jumped nearly 60 percent from the 12-month period before the law came into effect, reaching HK$150 billion.

The total value of asset and wealth management business reached HK$34.9 trillion at the end of 2020, a 20% increase from the period before the law was implemented. and total deposits in Hong Kong’s banking system stood at around HK$15.3 trillion, nearly 10 percent higher than before, according to official data.

As a fully open international financial center, Hong Kong needs to make different preparations and plans for various risks as the geopolitical situation continues to be tense, Chan noted.

“The recent Russian-Ukrainian conflict made people realize how the United States would militarize its own currency and certain international financial systems to distort and interfere with the functioning of the international financial market,” he said.

“We must clearly recognize the basic truth that ‘national security is the premise of economic development, and economic development is the guarantee of national security,'” the finance chief stressed.

Chan also said that the Hong Kong SAR authorities will continue to simplify rules on secondary listings for Chinese companies listed in the United States and make more efforts to strengthen Hong Kong’s role as a bridge between the mainland of China and the rest of the world.

The recent intensification of the US government’s crackdown on US-listed Chinese companies will further deter companies from seeking IPOs in the US, which was once a haven for global fundraising, and speed up the process. for Chinese companies listed in the United States that look to the mainland or Hong Kong markets, according to experts.

Since 2019, a total of 21 Chinese stocks listed in the United States have been transferred to Hong Kong through secondary listings or dual listings, Chan said, accounting for more than 70% of the total value of all stocks. Chinese companies listed in the United States in terms of market capitalization.

The nation’s support and institutional advantages of the “one country, two systems” policy enable Hong Kong to chart a successful development path through continuous efforts in a changing international environment, Chan said. noting that connectivity is one of Hong Kong’s unique advantages that other markets struggle to copy.

From Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect to Bond Connect – a mutual bond access program between the mainland and Hong Kong, various mechanisms are gradually providing new opportunities for Hong Kong, transforming it into a safe channel to connect the capital markets of mainland China and overseas.

The China Securities Regulatory Commission said in a statement on Friday that it has agreed to include exchange-traded funds in the Hong Kong connection programs, and the official launch date will be announced later, as preparations will take about two month.

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