Following is the full text of the speech (English only) by the Financial Secretary, Mr Donald Tsang, at the SCMP Fund Manager of the Year Awards 2000 today (February 28):
Distinguished guests, ladies and gentlemen,
Thank you Grant for that kind introduction. It is a pleasure to join you all for this prestigious event that recognises the contribution of fund managers to the success of Hong Kong. It is a recognition of what fund managers are supposed to do. That is to prudently and profitably manage the money entrusted to them by the investing public.
But success comes at a price. A price that requires one to keep up the hard work next year, and the year after, and the year after, and so on. Maintaining the momentum remains the real challenge. So, congratulations on a successful year's investing and may this coming year prove to be even more profitable.
Hong Kong undoubtedly has one of the most vibrant and sophisticated fund management industries in the region. In the five years to December 2000, the number of authorised funds grew from about 1,200 to nearly 2,000 - a rise of more than 60%. But the net asset value of those funds grew from US$82 billion to about US$311 billion - an increase of almost 280%. So the industry is growing well and, I believe, will continue to do so.
The launch of the Tracker Fund (TraHK) and the introduction of the Mandatory Provident Fund have no doubt had a significant impact on the fund management sector in the past year. The Tracker Fund launched in November 1999 has been very well received by investors and boosted investor interest generally in the funds industry.
Since the launch of the MPF Scheme in December last year, there has been a flurry of enrolment activities. Today, 80% of employees, 70% of employers and 90% of the self-employed have joined. And the MPF Schemes Authority continues to work hard to ensure that all employees come under the umbrella of an MPF scheme as soon as possible.
Some of you might have heard just how much money will be accumulated under the scheme but the figures merit repeating for the simple reason that they show us just how much business is coming onto the market. Initially, we expect MPF contributions to total about $10 billion annually, and a significant portion of that will be managed by the funds industry. This will rise to about $60 billion annually after 30 years. So there is a huge amount of MPF business coming on stream, which I believe will spur interest in other types of investment funds as our population saves for a comfortable retirement.
Looking ahead there is no doubt that the Mainland's impending accession to the World Trade Organisation will bring a host of new opportunities to the investment funds industry. Many Hong Kong firms have already teamed up with Mainland partners in anticipation of the greater access to the Mainland's vast market that will come with WTO membership. Obviously, companies already in Hong Kong will have a first-mover advantage in bringing investment products and expertise into the fledgling Mainland market.
At the moment there are only 40 closed-end funds operated by 14 companies in the Mainland. Compare this with the nearly 2,000 authorised funds available in Hong Kong and you will realise the enormous potential for growth in the Mainland.
Ladies and gentlemen, the financial services sector in Hong Kong has a tremendous future. It is, after all, one of our greatest strengths and for that, all of you here tonight must take some of the credit. Your hard work, professionalism and integrity have helped make Hong Kong an international financial centre. I firmly believe that we can and will do even better in the years ahead.
Finally, congratulations to all of tonight's winners and a special word of thanks to the South China Morning Post and Standard & Poor's Funds Services for giving these important annual awards for the investment funds industry.
End/Wednesday, February 28, 2001