As China and the United States agreed to a framework for trade talks, Hong Kong’s benchmark Hang Seng Index rebounded on Wednesday to its highest in the past two and a half months. Financial Secretary Paul Chan Mo-po said he is confident that the local stock market will maintain upward momentum in the second half of the year.

The HSI surged 204 points to 24,367 on June 11, even approaching the 24,874-point peak set in March — before the announcement of the US’ “reciprocal tariffs”.

The finance chief said he expects more international companies to go public and invest in Hong Kong, a city with a free and stable business environment. He said international funds can flow in and out of the city at any time, adding that the special administrative region’s government will continue to “ensure financial security stability”.

READ MORE: Chan: Hong Kong top IPO market globally year-to-date

Moreover, “the low capital interest rates at the moment are good for homeowners and businesses,” Chan said at a forum in Hong Kong on Wednesday. The one-month Hong Kong Interbank Offered Rate (Hibor) recently hit a three-year low, substantially reducing the Hibor-based real mortgage interest rate.

“This is market behavior, so we won’t interfere,” Chan said. “In the future, I think the key drivers for Hong Kong’s economy will be financial services, trading and technology and innovation.”

“The city’s economic recovery should be attributed to Hong Kong’s adaptability, as local businesses can find their positions in the megatrend of geopolitics, green transformation, and digital economy, take advantage of the uniqueness of the ‘one country, two systems’ principle and become a platform for the Chinese mainland and international investors,” Chan said in response to Stephen Roach, a senior fellow at Yale University and former chair of Morgan Stanley Asia.

In a recent Bloomberg report, Roach, an American economist, said that if he were writing a story again, it would be that Hong Kong is experiencing a revival because of its Chinese characteristics, not in spite of them.

READ MORE: Chan shows cautious optimism about HK stock market

Regarding tariff talks between China and the US, Robin Xing, chief China economist of Morgan Stanley, said he expects the US tariff rate on China to remain around 30 percent to 40 percent by the end of the year, posing a downside risk to the economy.

Contact the writer at thor_wu@chinadailyhk.com