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Following is a speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the MOU Signing Ceremony between HKEx and Abu Dhabi Securities Market today (March 28):
Consul General, Mr Al-Baloushi, Ron, Paul, ladies and gentlemen,
I am pleased to attend today's ceremony to witness the signing of an MOU between the HKEx and the Abu Dhabi Securities Market (ADSM). The MOU is the first major co-operation initiative between Abu Dhabi and Hong Kong following the successful completion of a Hong Kong delegation visit to the Middle East just less than two months ago. The MOU signifies an important step in enhancing financial services co-operation between Abu Dhabi and Hong Kong with a view to capturing the emerging opportunities in the Middle East and Asia.
ADSM
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Economies in the Middle East have always been the focus of the global market, not only because of their crucial role as oil exporters, but also due to their increasingly active involvement in many other realms of business such as trade and finance around the world. The impressive economic performance and financial developments in the Middle East no doubt bring with them abundant opportunities for the development of the securities market in Abu Dhabi.
Hong Kong as an IFC
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In Asia, Hong Kong is gaining increasing prominence as a major financial hub renowned for its free economy, world-class regulatory regime, advanced market infrastructure and ample supply of financial talent. As at the end of last month, our stock market was the 7th largest in the world and the 2nd largest in Asia. Being an important fund-raising platform for enterprises in the region, we were the second largest IPO fund-raiser in the world in 2006. Hong Kong has a well-established banking system and an expanding asset management business with total value exceeding US$580 billion at the end of 2005. Above all, Hong Kong is strategically located as gateway to China, which makes us best-positioned to facilitate financial intermediation between China and the rest of the world.
The high liquidity and strong fund-raising capability of our stock market has long made us Mainland Chinese enterprises' most preferred listing venue outside the Mainland. So far, over 365 Mainland enterprises were successfully listed on our stock market raising over US$191 billion. Amongst them includes the listing of the Industrial and Commercial Bank of China last October, which has attracted keen interest from Middle East investors. Mainland enterprises now account for nearly 50% of our total market capitalisation and 66% of the daily equity market turnover. In future, as Mainland enterprises continue to grow and develop in tandem with the economic reforms and development, we expect that Hong Kong will continue to play an important role in channeling international capital to Mainland enterprises through our stock market. And I encourage Middle East investors to participate in the growth of the Chinese economy using Hong Kong's financial market as a platform.
Other financial opportunities
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Recently, there have also been other encouraging developments presenting huge opportunities for Hong Kong's financial markets. These include the agreement by the Central People's Government to further expand the renminbi business in Hong Kong by allowing financial institutions in Mainland China, upon obtaining approval, to issue renminbi-denominated financial bonds in Hong Kong. Besides, the CPG has been implementing measures to allow investments in overseas financial markets by authorised institutions within an approved limit. Hong Kong's capital market stands ready to benefit from the increasing capital outflow from the Mainland.
Concluding remarks
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All in all, I think I can firmly draw the conclusion that there is no better place than Hong Kong for an overseas company or investor to access the investment and business opportunities in the rising Mainland market. And I am sure HKEx has made the right choice in partnering with ADSM in exploring business opportunities in the promising Middle East. I would like to congratulate the ADSM and HKEx on the signing of an MOU which marks the commencement of a constructive cooperation relationship between the stock markets of both sides.
Ends/Wednesday, March 28, 2007
Issued at HKT 12:40
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