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Following is the speech (English only) by the Acting Chief Executive, Mr Henry Tang, at the Fifth Anniversary Cocktail Reception of the Hong Kong Exchanges and Clearing Limited this evening (June 16):

Charles, Paul, Members of the Board of Directors, distinguished guests, ladies and gentlemen,

It is my great pleasure to be here today to celebrate the fifth anniversary of the listing of the Hong Kong Exchanges and Clearing Limited.  This is the day to celebrate a success story - the success of Hong Kong Exchanges in establishing itself as one of the top exchanges in the world and its enormous contribution to Hong Kong as an international financial centre.

The mission of Hong Kong Exchanges has always been to operate a world-class marketplace, in particular for Hong Kong and Mainland securities.  With the dedication of all the directors and the staff members, Hong Kong Exchanges has successfully become the market of choice.  Just in five years since the listing of Hong Kong Exchanges in 2000, the number of listed companies has increased from 743 to 1097.  Both the market capitalization and turnover reached all-time highs in 2004.  Hong Kong Exchanges' record is equally impressive when compared to other leading financial centres.  In 2004, HKEx was the third largest capital formation centre in the world, surpassing London and Tokyo.  Ten years ago, I believe no one would ever imagine Hong Kong could raise more money than London and Tokyo.

Many Mainland enterprises have chosen to list on Hong Kong Exchanges for access to this deep pool of capital from all over the world.  Mainland enterprises now account for 28% of the listed companies, 30% of the market cap, and 40% of the market turnover of Hong Kong Exchanges.  Vast majority of Mainland enterprises listed outside the Mainland have chosen to list in Hong Kong.  Of those listed in Hong Kong and other overseas markets, 70% of the trading is still done in Hong Kong.  This critical mass of Mainland enterprises serviced by the Hong Kong Exchanges has successfully reinforced Hong Kong's position as the premier capital formation centre for the Mainland.

Hong Kong Exchanges has not only provided issuers with efficient capital formation services, but has also developed itself into one of the pre-eminent exchanges for investors from all over the globe.  Overseas investors have constantly constituted 35%-40% of the total trading volume in the past four years.  This clearly demonstrates international investors' strong confidence in our exchange, which is only made possible by Hong Kong Exchanges' efforts in enhancing corporate governance and the market quality.

Hong Kong Exchanges is indeed more than a market operator and a frontline regulator.  It has established close partnership with other sectors to help build a caring society.  Some of you may be aware that Hong Kong Exchanges has operated the Stock Code Balloting Scheme with the Community Chest of Hong Kong for six years.  In 2004 alone, it raised a total of about $28 million from the Scheme.  Hong Kong Exchanges has also sponsored the 2004-2005 China-Hong Kong Investment Simulation Competition which helped university students from Hong Kong and the Mainland familiarise themselves with the securities markets in Hong Kong and on the Mainland.  Hong Kong Exchanges has set an excellent example of being successful in the business world while at the same time contributing to the wider community.  

Hong Kong Exchanges' success is not possible without the dedication, visionary leadership and commitment of the Board of Directors, the Chairman in particular, over the past years.  Let me extend my congratulations to all members of the Board on this wonderful occasion.  I wish Hong Kong Exchanges every success in the years to come.

Thank you.

Ends/Thursday, June 16, 2005

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