Hong Kong needs to do more to promote its markets and explore broader and diversified sources of funding, as the overall environment becomes relatively favorable, and investors seek higher returns with a greater risk appetite, Financial Secretary Paul Chan Mo-po said in his Sunday blog.
The US Federal Reserve cut interest rates by 50 basis points last week, with many major central banks worldwide acting in tandem, reinforcing market expectations of a gradual fall in global interest rates.
“It can be expected that the future trend of Hong Kong interest rates will be roughly the same as those of the US under the pegged exchange rate system, while the speed and extent of rate reductions will depend on local capital flows and market conditions,” Chan said.
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Responding to the Fed’s move, the Hong Kong stock market reacted positively, making its strongest rebound in more than two months. The benchmark Hang Seng Index closed at 18,258 points on Friday, with a cumulative increase of nearly 7 percent for six consecutive trading days.
The trading volume also improved, reaching HK$176.8 billion ($22.66 billion) on Friday – the highest in nearly four months.
Chinese mainland home-appliance maker Midea Group went public on the Hong Kong bourse last week, raising HK$31 billion, making it the second-largest initial public offering the world so far this year.
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The amount of IPO funds raised in the special administrative region this year has surpassed last year’s, propelling Hong Kong to fourth place in the global IPO fundraising rankings. About 100 other companies are also queuing up to list in the city, some seeking to raise at least $1 billion.
Meanwhile, Hong Kong has continued to see an increased inflow of funds, with total bank deposits rising by about 4 percent to HK$16.8 trillion in the first seven months of this year, compared with the end of 2023.
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“The loose market environment is conductive to industrial and commercial investment,” Chan said. “Hong Kong will continue to strengthen cooperation and promotion with traditional and emerging markets to inject new impetus into the local capital market.”
The finance chief left for Europe on Sunday on a mission to attract investments to the SAR. He will visit Madrid and London.
Besides meeting representatives of enterprises and touring companies in Spain and the United Kingdom, Chan will attend dinner meetings and roundtable discussions to promote Hong Kong’s strengths.
His delegation includes executives of Hong Kong startups who’ll negotiate with representatives of innovation and technology institutions and venture capital funds to explore business opportunities.
Contact the writer at thor_wu@chinadailyhk.com
