Following is the speech (English only) by the Financial Secretary, Mr Henry Tang, at the Hong Kong Exchanges and Clearing Limited Cocktail Reception this (June 17) evening:
Charles, Paul, Members of the Board of Directors, distinguished guests, ladies and gentlemen,
I am very much delighted to join you this evening to celebrate the fifth year of listing of Hong Kong Exchanges and Clearing Limited. I must stress the word "celebrate". The listing of Hong Kong Exchanges in 2000 marked a major milestone in the development of Hong Kong's capital markets. Five years on, no one doubts its success.
Since the listing of Hong Kong Exchanges in 2000, the market capitalisation of our exchange has increased from HK$4,856 billion to HK$5,484 billion at the end of May 2004. The number of listed companies has soared from 743 to well over 1,000. Trading volumes have also enjoyed an increase of 67 per cent. More than this, Hong Kong Exchanges has faithfully served the important public function of ensuring a fair and orderly market, thereby safeguarding the integrity and stability of our financial system. Hong Kong Exchanges has become one of our key strategic economic assets.
Hong Kong Exchanges provides a world-class capital market structure and promotes a free flow of capital across markets. Its state-of-the-art infrastructure serves issuers, investors and intermediaries across all time zones.
For issuers, Hong Kong Exchanges is not just instrumental in helping them channel funds from the local equity market. By choosing to partner with Hong Kong Exchanges, companies establish a badge of quality, which can enable them to realise their full growth potential by tapping funds from the international market.
For investors, Hong Kong Exchanges has created a market where all investors, both retail and institutional, are assured of fairness and transparency, and security of trading and settlement. They can also enjoy a wider range of investment products - over the past few years, Hong Kong Exchanges has launched various new products such as Exchange Traded Funds and Equity Linked Notes. And I am pleased to note that Hong Kong Exchanges is working on a model for a scripless securities market.
As for intermediaries, the introduction of enhanced trading facilities and IT systems has enabled them to reduce their risks and operating costs. The recent launch of the Derivative Clearing and Settlement System represents another success by Hong Kong Exchanges in upgrading the market infrastructure and enhancing efficiency.
Hong Kong Exchanges is more than a Hong Kong-based stock exchange. Over the past decade or so, it has emerged as the key international capital market for Mainland enterprises, as Charles has just highlighted with all those very impressive figures. With the establishment of a representative office in Beijing last year, I am sure Hong Kong Exchanges' position as premier choice for leading Mainland enterprises wishing to tap the international capital market will be further enhanced.
While Hong Kong Exchanges has successfully established itself as one of the top exchanges in the world, we cannot be complacent. There is growing competition from other markets. Our ability to stand up to new challenges depends on our reputation, which in turn hinges on market quality. This is the key element for maintaining the attractiveness of our market to global investors. Our common goal is to preserve Hong Kong Exchanges' reputation as a fair, efficient, transparent and quality marketplace, where rules are effectively enforced and adhered to.
Certainly, Government has a role to play in maintaining our regulatory framework on par with international standards and meeting local market needs. This is why we have taken the lead to draw up measures to improve the regulation of listing in March 2004. These measures include:
- giving statutory backing to the more important listing requirements;
- calibrating a range of statutory sanctions to encourage compliance and deter breaches; and
- introducing a series of administrative measures to enhance the transparency and accountability of the listing regime.
I look forward to your continued support in bringing these measures into early fruition.
Lastly, I would like to take this opportunity to thank all members of the Board of Directors, the Chairman in particular, for their dedication and commitment over the past years. A number of them have actually been serving on the Board before the merger exercise and the listing of Hong Kong Exchanges. Their invaluable contributions have laid a solid foundation for the success which we witness today and which I am sure will continue in years to come. It is a great accomplishment and one which has put Hong Kong's reputation both as a leading international financial centre and the premier capital formation centre for our country securely on the map.
End/Thursday, June 17, 2004