The Stock Connect cross-border trading scheme stands as a “secret weapon” that distinguishes Hong Kong's stock exchange from its global peers, according to Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing (HKEX).
Hong Kong’s long-cherished market openness makes it essentially a connector linking money from all around the world. And the Stock Connect trading link makes the special administrative region the only market where companies that are listed on the local exchange can tap money from the vast Chinese mainland markets, where investors are known to be hungry for diversification, Chan told a panel discussion at the ninth Belt and Road Summit in Hong Kong on Thursday.
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Launched in 2014, the Stock Connect concept connecting the Chinese mainland with the rest of the world through capital markets via the Hong Kong SAR adds more than 800 companies with market capitalizations equivalent to $1 billion or more to the universe of stocks available to global investors.
As the most dynamic and vibrant capital market across the globe, Hong Kong raised funds via initial public offerings (IPO) amounting to HK$2.29 trillion ($293.65 billion) between 2014 and 2023.
“This makes us land the top spot in the global IPO league tables, even well ahead of US counterparts,” said Chan, who has entered the history books as the first woman to serve as CEO of the city’s bourse operator, which runs the third-largest stock exchange in Asia.
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As the urgent need to accelerate the green transition becomes the focal point of common development and shared prosperity, another matter of urgency has arisen: money.
Citing China as an example, Chan said that the money needed for the world’s second-largest economy to meet its goal of carbon neutrality by 2060 is as much as $21 trillion.
She said this is where Hong Kong can come in, capitalizing on its well-established financial infrastructure and its unique advantages, including the Stock Connect.
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With today’s rhetoric painting such a gloomy picture of global supply chain disruptions and deglobalization, Chan cautioned that the main obstacle to the joint pursuit of the Belt and Road Initiative is the fact that the “decision to deploy capital is not pure, not based on economic theories. There are a lot of things getting in the way.”
But “collective success from countries and regions is exactly the spirit of the Belt and Road Initiative. And this is what makes the massive initiative the most powerful,” said Chan, who took the helm of HKEX in March this year.
The two-day Belt and Road Summit, jointly organized by the Hong Kong Special Administrative Region government and the Hong Kong Trade Development Council, has brought together nearly 6,000 participants from 70 countries and regions.
