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Following is a speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the Fifth Anniversary Cocktails of the Hong Kong Association of Online Brokers today (May 11):
It gives me great pleasure to join you at the 5th anniversary of the Hong Kong Association of Online Brokers (HKAOB). The celebration is timely as the market capitalisation of our stock market has recently surpassed HK$10 trillion and set a new milestone. I would like to extend my warmest congratulations to the association as well as the stockbroking industry for the encouraging news on this joyful occasion.
When the HKAOB was established in 2001, the market capitalisation of our stock market was about $3,800 billion, with an average daily turnover of $8 billion. Today, our market capitalisation has exceeded $10 trillion and the average daily turnover has increased by three times to over $32 billion. At present, our stock market ranked the 8th globally and 2nd in Asia. It has also become the number one equity fund raising market in Asia, with more than HK$300 billion raised in 2005. These remarkable achievements are the result of the concerted efforts of the Government, the regulators and the market practitioners, who have spared no efforts in fostering a robust market environment for capital formation and investment.
The recent promulgation of a new scheme by the Mainland Government to allow investments in securities outside the Mainland, commonly referred to as QDII, has in some way increased investors' interest in the stock market and contributed to the active market turnover. Indeed, the Mainland Government's adoption of a more liberal policy for investments outside the Mainland will have a positive and far-reaching impact on our capital markets. Suffice to say that Hong Kong's continued success would also hinge on how well we position ourselves in tapping the Mainland market. I strongly encourage our financial sector to act promptly to make the best use of this golden opportunity to serve the vast investing community in the Mainland. I also urge the financial sector to continue to maintain a close dialogue with their Mainland counterparts, keeping them posted about the developments of the Hong Kong financial markets and inviting them to make greater use of our efficient financial platform. As our stock market continues to grow in terms of breadth and depth, investors' confidence and interest in entering the market would be further enhanced. With a bigger and more lucrative market, local and foreign institutions and industry practitioners can all enjoy a bigger slice of the "cake".
Alongside the promising development of our securities and futures market is keener competition among other major stock markets in the region. With the increasingly globalised and sophisticated financial markets, it is of paramount importance that our stockbroking industry continues to sharpen its competitive edge to cope with the challenges of an ever-changing environment and to meet the higher expectations of the investing public. For instance, with the advances of technology and rising popularity of the internet, online securities trading is now a worldwide trend. As an international financial centre, we must strive hard to remain competitive and stay ahead. I am very glad to see HKAOB's foresight and dedication to promote online securities trading in Hong Kong. Online securities trading was first introduced in 1997. With a relatively short history back then, online trading was not very popular when HKAOB was established. The association has, over the years, made tremendous efforts in promoting online securities trading through strengthening investors and intermediaries education and such efforts are now paying off. According to the Retail Investor Survey released by the Securities and Futures Commission (SFC), there was only 10% retail investors who had traded online in 2001. The percentage has now increased almost three-fold to 28.3%. I believe that the use of an online platform for securities trading will continue to prevail. In the years ahead, I am sure the HKAOB will continue to contribute significantly in nurturing a secure and efficient online market environment for the benefits of the investing public.
While I do not have a crystal ball to tell the future, I am confident that our securities and futures sector will scale new heights as more Mainland companies are seeking to list in Hong Kong and the QDII scheme has begun to take shape. At the end of last year, when Hong Kong's stock market overtook the Spanish Exchanges and rose to the 8th place in the world, I predicted that our ranking would rise further. Now it seems that the prediction may become a reality soon.
May I count on your continued support in our endeavour to further develop Hong Kong as an international financial centre and one of the major stock markets in the world. Again, my heartfelt congratulations to the HKAOB. Thank you.
Ends/Thursday, May 11, 2006
Issued at HKT 19:36
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