Email this article news.gov.hk
Speech by FS at Asia Private Equity Forum 2013 (English only)(with photo/video)
********************************************************

     Following is the speech delivered by the Financial Secretary, Mr John C Tsang, at the Asia Private Equity Forum 2013 at the Hong Kong Convention and Exhibition Centre this morning (January 16):

Mr (David) Pierce, distinguished guests, ladies and gentlemen,

     Good morning.

     It is my great pleasure to join you all this morning. It is an important day for us in the Hong Kong Government because it marks the occasion that the Chief Executive will deliver his first Policy Address of the current term later on this morning.

     Congratulations to the Hong Kong Venture Capital and Private Equity Association (HKVCA) on organising the third Asia Private Equity Forum.

     Once again, this Forum follows on from the Asian Financial Forum (AFF), which ended yesterday. I hope that those of you who attended the AFF enjoyed the lively discussions on financial development in this region and around the world.

     Since we are right at the beginning of a new year, I would like to get the ball rolling today by looking ahead. What can we expect from Hong Kong this year as a global hub for finance in Asia?

     This region has provided one of the few bright spots around the world in the past year amid the recent global financial turmoil. Asia continues to attract new investment opportunities, and Hong Kong is at the centre of the action. Signs are that Mainland China will regain its economic growth momentum this year, while the outlook for the US and the Euro zone is less clear because these regions continue to struggle with their own financial and economic difficulties.

     In terms of wealth creation, as the centre of gravity of the global economy shifts to the East, we see an increasing number of high-net-worth individuals in the Asia-Pacific region, making our region the fastest growth market for wealth management.

     Hong Kong's asset management sector remains strong. In 2011, combined fund management business in Hong Kong amounted to some US$1.2 trillion. Over 60 per cent of the total fund management business in Hong Kong originated from overseas. Also, over half of the investments focused mainly on Mainland China and Hong Kong.

     Total capital under management in private equity in Asia has been rising steadily. According to market data, it grew to about US$410 billion as at end-June 2012. That represents a 9 per cent increase in just the first half of last year.

     Hong Kong accounts for a significant proportion of the private equity in the region, with about 370 private equity firms operating in the city. It is encouraging for us that nearly 90 per cent (88 per cent) of these companies have their regional headquarters here in Hong Kong.

     In terms of total private equity funds raised in the first half of 2012, Hong Kong accounted for about 12 per cent of the Asian total, second only to Mainland China.

     In the year ahead, we shall continue to play a leading role in promoting offshore business using the Mainland currency, the Renminbi.

     With our city's free flow of capital, effective rule of law and robust regulatory environment, Hong Kong is a fertile testing ground for the internationalisation of the Renminbi.

     At the same time, the offshore Renminbi market is maturing in terms of price discovery, product range and balancing demand and supply of Renminbi funds.

     In the past year, we have seen an expansion of Renminbi loans, steady Renminbi bond issuance and the introduction of new Renminbi financial instruments and products. The value of outstanding Renminbi loans in Hong Kong is about 70 billion Renminbi, which is more than double the amount at the end of 2011.

     Hong Kong's role as an offshore Renminbi centre is part of the national policy enshrined in the Central Government's National 12th Five-Year Plan.

     This plan gives full support to Hong Kong's development as an asset management centre and international financial gateway to the Mainland.

     Given the Mainland's rapid economic growth and the increasing affluence of its people, we can expect more overseas investors to be attracted to the opportunities in Mainland China.

     Over many years, Hong Kong has established a strong platform for financial development. The Government will continue to introduce initiatives to further develop the asset management industry.

     Just last week, we tabled a bill at the Legislative Council that will help increase the attractiveness of Islamic finance in Hong Kong. The bill will amend relevant taxation laws to provide a taxation framework for Islamic bonds, or sukuk, on a par with that for conventional bonds.

     We shall work closely with our legislators to ensure a smooth passage of the bill. Islamic finance is among the fastest growing areas of international finance. Hong Kong is primed to take advantage of this trend. We have highly developed financial infrastructure, a transparent regulatory system and a cluster of international banks and financial talent keen to explore the potential of Islamic finance in Asia.

     We are also working on amending our trust law to provide a modern and accessible regulatory framework for trusts governed by Hong Kong law. The amendments will sharpen the efficiency and competitiveness of our trust services industry. We expect to introduce the Amendment Bill into the Legislative Council shortly.

     Another area where the Government continues to be active is in the expansion of our network of double taxation agreements with our partners overseas. We have completed 27 such agreements with our trading and investment partners so far. More are in the pipeline.

     Ladies and gentlemen, developing Hong Kong's asset management industry requires input and support from different sectors and a commitment to sound operating practices.

     We are grateful to the HKVCA for lending its expertise and sound advice to the Government in developing relevant areas of our financial services sector.

     The Association has co-ordinated with different government departments on a range of topics and assisted with our international promotions to raise Hong Kong's profile as China's global financial centre.

     Our regulators, the Hong Kong Monetary Authority and the Securities and Futures Commission, are also working closely with the industry to develop a competency framework for private wealth management practitioners.

     In addition, the regulators are assisting the industry to set up a Private Wealth Management Association and devise a code of conduct applicable to the sector.

     These are some of the development areas that, we are confident, will help make Hong Kong's financial services sector even more resilient and competitive, and strengthen our city's role as an international financial centre in Asia.

     On that note, I would like to wish you all a successful Asia Private Equity Forum and a happy, healthy and prosperous 2013.

     Thank you very much.

Ends/Wednesday, January 16, 2013
Issued at HKT 10:23

NNNN

Photo
Print this page