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HKEx Rolls Out Three-Year Plan

by Mary Swire, Tax-News.com, Hong Kong

12 December 2006


Hong Kong Exchanges and Clearing has rolled out its strategic plan for 2007-09, providing a roadmap for the next three years with the themes of reinforcing its position in relation to mainland China, further expanding business and improving service delivery and quality.

Presenting the plan at the recent Securities Institute roundtable luncheon, HKEx Chief Executive Paul Chow noted that, aided by favourable market conditions, the body has made good progress in the listing of Mainland enterprises, including major state banks and insurance companies.

As at November 30, there were 1,159 listed companies in Hong Kong, with a market capitalisation of HK$12.197 trillion (US$1.57 trillion), a total of HK$424.8 billion equity funds raised and an average daily turnover of HK$32.8 billion. Among the listed companies, 354 came from the Mainland, which accounted for 48% of the market capitalisation and 73% of the total equity funds raised.

Noting that Hong Kong has become the major capital formation centre in the Asian region, Mr Chow said that new challenges and opportunities are emerging, and HKEx has to bolster its overall performance and advance its mission to be a leading international marketplace for securities and derivatives products focused on Hong Kong, the Mainland and the rest of Asia.

Under the strategic plan, 16 key initiatives (grouped under five key areas) were identified:

  • Listing - complete Growth Enterprise Market review and related market development, implement 'statutory backing', and open the equity listing regime to issuers from overseas jurisdictions;
  • Trading - improve trading rights regime, address barriers to Cash and Derivatives Markets trading, introduce further Mainland-related and renimbi-denominated products, and explore new product and service areas;
  • Clearing - facilitate overseas-based clearing participants, and improve investor participant and stock segregated accounts services;
  • Corporate - strengthen the accountability regime within HKEx, review its organisation structure and resources deployment, consolidate it offices and data centres, and review fee structure; and,
  • Information technology - review HKEx information technology systems for possible efficiency improvement.

Mr Chow anticipated that by the time the Strategic Plan 2007-09 has been fully implemented, HKEx should have substantially improved its overall performance level and further strengthened its position in relation to the Mainland, including capturing more Mainland-related listings, trading more Mainland-related products, and engaging more Mainland-related participants and investors.

HKEx also expects to have expanded its business into new areas, including developing an Asian focus and diversifying into new product types, and to have become a more business-orientated organisation, with accountability for business results more directly assigned to senior management.

A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp

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