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Following is a speech (English translation) by the Financial Secretary, Mr Donald Tsang, in attending the signing ceremony for the listing of Bonds issued by the Ministry of Finance of the People's Republic of China in Hong Kong today (Monday):
Minister Xiang, Mr. Tung, Mr. Jiang, Commissioner Ma, Chairman Lee, Ladies and Gentlemen,
I have pleasure in attending today's signing ceremony for the listing of bonds issued by the Ministry of Finance of the People's Republic of China. The signing ceremony represented that Hong Kong's securities market has entered into a new era, it also symbolised that our role as China's fund raising centre has been further enhanced.
A stable and efficient debt market provides an effective avenue for Governments and enterprises to raise capital. It is critical to the steady development of the financial industries as well as to the overall stability of the regional economies. The financial turmoil which we have recently overcome displayed the need and importance for a mature and active debt market in the region.
Indeed, Hong Kong has been committed to develop our local debt market, and the result is satisfactory. According to the statistics by the Hong Kong Monetary Authority (HKMA), the gross value of all debt products in Hong Kong by end of August 1998 amounted to HK$390.7 billion, of which 17% or HK$97.4 billion were Exchange Fund Bills and Notes issued by the HKMA. The average daily turnover value of which was HK$8.1 billion. With a view to further enhancing the liquidity in the trading of Exchange Fund Bills and Notes, the Stock Exchange of Hong Kong (SEHK) is discussing with HKMA on the feasibility to list the Exchange Fund Bills and Notes in Hong Kong.
We will also continue to develop our own debt market by developing our settlement and clearing system. This would attract the trading of bonds and debts products issued by other countries such as Japan to trade in Hong Kong. We will continue to liaise with the settlement and clearing systems in other countries by exchanging information on back-up technology and joint operation with a view to achieving the goal of an "AsiaClear".
Furthermore, we are in the final stage of preparation for the launching of Mandatory Provident Fund (MPF) Scheme. Upon the implementation of the MPF scheme in year 2000, it will no doubt provide further development opportunities for our debt market.
Hong Kong has been playing the role of the fund raising centre for Mainland enterprises. I deeply believe that the bonds issued by the Ministry of Finance will soon develop as another successful product in the Hong Kong market. Quality bonds will help creating the critical mass in Hong Kong, enhancing liquidity which in turn will attract more tradings to be conducted in Hong Kong and as a result increase the potential of development for our debt market.
I wish to thank the Ministry of Finance for their support to the development of our debt market. I hope that the financial markets of the HKSAR will continue to serve the Central People's Government as well as the Mainland enterprises.
Thank you.
End/Monday, January 18, 1999
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