SFST's speech at HSBC x HKTDC Belt and Road Business Networking Luncheon (English only)
Luanne (Ms Luanne Lim, Chief Executive Officer, HSBC Hong Kong), ladies and gentlemen,
Good afternoon and welcome to the Belt and Road Business Networking Luncheon co-organised by the Hong Kong Trade Development Council (HKTDC) and HSBC. I was told that this luncheon was heavily over-subscribed and hence our co-organisers decided to move it to this more spacious venue (Convention Hall B at HKCEC) to accommodate more participants. Thank you for your great interest in joining the luncheon, and I am sure you will benefit from the wisdoms soon to be shared by our panellists on their experience and insights in actualising the business opportunities brought by the Belt and Road Initiative.
This year marks the 10th anniversary of the Belt and Road Initiative, so we have specially curated a Finance Chapter for the summit this time and I am sure many of you have participated in that session. Now I wish to continue the conversation from the Finance Chapter and share further with you the key areas of opportunities offered by Hong Kong for the Belt and Road initiatives in terms of our financial services offering.
First, it is on infrastructure financing. Infrastructure is the backbone of connectivity and development. Yet there exists a financing gap, particularly in Asia, which cannot be filled by public capital alone. Private sector participation is essential to mobilise more capital, resources and expertise for infrastructure projects. Hong Kong has a deep and liquid capital market that can provide various financing options for infrastructure projects, and a platform to foster public private partnerships. We also have a robust legal system that ensures the enforcement of contracts and the protection of investors' rights. In the Finance Chapter I talked about how Hong Kong, as Asia's renowned bond market, offers a range of options for governments and enterprises looking to finance infrastructure projects for the Belt and Road Initiative.
Indeed the Hong Kong Special Administrative Region Government has also participated first-hand in the infrastructure financing market, having successfully issued infrastructure loan-backed securities under a pilot scheme on infrastructure financing securitisation in May this year. The issuance was done by the Hong Kong Mortgage Corporation Limited (HKMC), consisting of a portfolio of 35 project and infrastructure loans in 25 individual projects, spreading across 12 countries and nine sectors, with a total value of around US$404 million. The issuance offers institutional investors exposure to a diversified portfolio of project finance, infrastructure and corporate loans across multiple geographies and sectors. The issuance itself is a policy measure announced in the 2022-23 Budget by the Financial Secretary, and it will further propel Hong Kong to become the premier international financing platform for the Belt and Road Initiative.
Leveraging our role as a fast developing international centre for green and sustainable finance, this issuance has also incorporated element of sustainability. One of the classes of securities issued is in accordance with the HKMC's Social, Green and Sustainability Financing Framework, which aligns with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines released by the International Capital Market Association. Also, the Asian Infrastructure Investment Bank (AIIB) participated in this issuance as an anchor investor, as a way to fulfil its strategy to mobilise private capital into the infrastructure sector, supporting infrastructure securitisation platform along Paris-aligned and net zero development pathway.
Indeed, I will be travelling to Egypt next week to attend the AIIB's annual meeting, and I very much look forward to discussing with the bank and its members further collaboration opportunities under the theme "Sustainable Growth in a Challenging World".
The next and final topic I wish to cover is Renminbi (RMB) internationalisation and our latest development. In the Finance Chapter I shared with you the prominent role of Hong Kong as the global offshore RMB business hub, and how we can capitalise on the opportunities brought by the expanding utilisation of RMB in bilateral trade and investment for the Belt and Road Initiative. Now I wish to share with you our new initiative launched earlier this year to expand the usage of RMB in our stock market, the HKD-RMB Dual Counter Model. Under this model, companies listed in our stock exchange can offer their shares in both Hong Kong dollars and RMB, and these shares would belong to the same class, with the same rights and entitlements, and be fully tradable across the HKD and RMB counters. So far 24 companies have launched new RMB counters under this model, and they collectively account for around 40 per cent of average daily turnover in our stock market. The launch of this model complements our existing product suite of RMB financial products, for example exchange-traded funds and debt instruments, and offers investors RMB exposures in our existing stocks with sizable market capitalisation and liquidity. Considering Hong Kong's advantages in terms of size of RMB pool at about RMB1 trillion, liquidity and product variety, our market is definitely the place to go for our Belt and Road partners looking for more opportunities riding on the trend of RMB internationalisation.
Having shared with you more on infrastructure financing and RMB internationalisation, let me conclude my remarks here and I wish you all an insightful panel and an enjoyable lunch to come. Thank you.
Ends/Thursday, September 14, 2023
Issued at HKT 16:01
Issued at HKT 16:01