Speech by CE at HKEx 10th Anniversary Cocktail Reception (English only)(with photos/video)

Speech by CE at HKEx 10th Anniversary Cocktail Reception (English only)(with photos/video)
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     Following is the speech by the Chief Executive, Mr Donald Tsang, at a cocktail reception to celebrate the 10th anniversary of Hong Kong Exchanges and Clearing Limited (HKEx) at JW Marriott Hotel this evening (June 22):

Ron (Arculli), friends, ladies and gentlemen,

     I cannot tell you how pleasurable it is for me to be here to thank you all of you and Ron for inviting me to join you on this very happy occasion. First of all, congratulations to the Hong Kong Exchanges and Clearing Limited on its 10th Anniversary.

     When I received Ron’s invitation a couple of months ago, my memory was brought back to the summer of 1998.  I was then Financial Secretary at the time of Asian Financial Crisis. In March 1999, we announced a package of reforms for our securities and futures market in response to the financial turmoil. And I still remember vividly the traumatic experience we went through from 1998 to the setting up of the Exchanges, particularly in talking to small and medium-sized stock brokers. There was a lot of resentment and opposition. Luckily the market and public sentiments were with us. And they asked us, “Well, what will you do if we refuse to do so?” And Charles and I said to them, “We’ve got Plan B”.  And the stock brokers said, “What is Plan B?”  “It’s called nationalisation.” And they threw up their hands in horror. “This is supposed to be a capitalist market”. I said, “But it broke down”. Anyway, the negotiation went on from there, and it was now history as Ron said. It proved to be a great success. Success, in reputational and territorial terms, and also in terms of wealth of individual stock brokers, particularly small and medium-sized ones. So in March 1999 we announced a package of reforms for our securities and futures market. A key element of that package was the modernisation of the structure governing our exchanges and clearing houses.

     The merger of the then stock exchange, futures exchange and the clearing houses took effect in March 2000 and the holding company - the Hong Kong Exchanges - became listed in June that year. It was one of the first stock exchanges in the world to go public.

     Today, the Hong Kong Exchanges is one of the world’s largest exchanges by market capitalisation.  I am truly grateful for the efforts of the Directors and all the staff members of the Hong Kong Exchanges over the past decade.  They have continuously improved the efficiency of our exchange, strengthened our listing platform, sourced new listing candidates and enhanced the robustness of the clearing infrastructure.

     Let me highlight some of the achievements of the Hong Kong Exchanges over the past 10 years.  In the first quarter of 2000, market capitalisation of companies listed on the Hong Kong Exchanges was about $5 trillion. In the first quarter of this year it was almost $18 trillion, ranking seventh in the world.

     In 2000, IPO Funds raised reached $132 billion.  Last year they amounted to some $248 billion, making Hong Kong the biggest IPO market in the world.

     For many years, Hong Kong has been serving as the premier capital formation centre for Mainland enterprises.  The Hong Kong Exchanges has also been working hard to attract quality companies from Europe, North America and Southeast Asia.  In recent years, the Hong Kong Exchanges has also been expanding in the derivatives and Exchange Traded Funds (ETF) markets.  Last year, it ranked first in the world in terms of securitised derivatives turnover, and was second in the Asia Pacific region in terms of ETF turnover.

     Looking ahead, we anticipate a number of challenges.  One is growing competition from other international financial centres; another challenge will be to capture the opportunities arising from the Mainland’s financial liberalisation.

     In announcing its Strategic Plan 2010-12 in March this year, the Hong Kong Exchanges is tackling these issues head-on.  For instance, the Strategic Plan prepares for the internationalisation of Renminbi; it aims to develop new products, and to strengthen trading platforms and infrastructure in order to capture new market opportunities.

     In particular, I am pleased to note the Exchange’s determination to support the development of a scripless securities market.  This will go a long way to enhancing Hong Kong’s long-term and sustainable development as an international financial centre.

     The Hong Kong Exchanges’ Strategic Plan is consistent with the Government’s policy.  We will continue to develop Hong Kong as a global financial centre, asset management centre and offshore Renminbi business centre attracting capital from within and outside the country.

     Our strength as a global financial centre rests with our unique experience in implementing the Mainland’s financial reform initiatives offshore, our financial regulatory regimes being compatible with those of leading financial centres in other time zones and our global connectivity. These strengths are unmatched by our neighbouring competitors.

     The re-structuring of the Exchanges 10 years ago has had far-reaching implications.  I’m very pleased that the reformed Exchange has fulfilled its mission and has sustained its competitiveness among other listing exchanges in the world.

     I look forward to an even stronger Hong Kong Exchanges, offering more quality and innovative products to investors and deepening our pool of international capital.

     Once again, congratulations on your 10th Anniversary.  I wish the Hong Kong Exchanges continued success.

     Thank you and have a great evening.

Ends/Tuesday, June 22, 2010
Issued at HKT 20:40

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