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Tuesday, April 18, 2017, 22:59

Hong Kong stocks to reap from national strategies

By Duan Ting
Hong Kong stocks to reap from national strategies
Panellists share their views at the first Hong Kong Listed Company Summit Forum and the 2016 Hong Kong Top 100 Stocks Award Ceremony on Tuesday. A growing number of tech companies in China are stealing a march on their international counterparts as the quest to raise funds accelerates. (Parker Zheng / China Daily)

The Chinese mainland’s burgeoning economy, backed by a slew of national economic strategies, will propel Hong Kong’s equity market in the near future as funds-hungry mainland enterprises continue to make their presence felt in the city, a business forum heard on Tuesday.

Last year alone, 117 companies went public in the SAR, raising a total of HK$196.1 billion, enabling the city to keep its crown as the world’s top venue for initial public offerings, said Liu Anlin, president of China Life Insurance (Overseas) Co Ltd, at the first Hong Kong Listed Company Summit Forum and the 2016 Hong Kong Top 100 Stocks Award Ceremony.

According to Cui Li, an economist at CCB International Securities Ltd, about 8 percent of the enterprises listed in Hong Kong in the past four years were from the technology sector, compared with less than 5 percent annually prior to 2012.

A growing number of startups and tech companies from Hong Kong and on the mainland are stealing a march on their international counterparts as the quest to raise funds accelerates.

Cui believes that the country’s new economy has already surpassed that of the United States in terms of return on investment and capital expenditure. She said Hong Kong could act as a connector, diversifying its products and improving liquidity in the market, to match the demand of companies for funds through global investment and to support innovation.

Lo Yuk-yee, chairman of Finet Holdings Ltd, told the forum that technology and innovation, including artificial intelligence and big data, have given startups the impetus to grow.

At the same time, Hong Kong’s two stocks trading links with the mainland — the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connects — have helped lure more companies to float in the SAR as communication links with the mainland surge, generating a greater flow of funds into the local capital market.

Li Ting, chief executive of Yunfeng Financial Group, stressed that Hong Kong’s potential lies in its established financial system and presence of global financial institutions which, in turn, help to build up the city as an international financing center for tech enterprises.

China Life’s Liu added that the mainland’s new strategic policies, including the Belt and Road Initiative, the planned development of the Xiong’an New Area in Hebei province, as well as the Guangdong-Hong Kong-Macao Greater Bay Area, will lift Hong Kong’s role as an international finance hub and super-connector.

Hong Kong also has to keep up with the new economic situation and undertake a transition to better assist the mainland economy to find a new sally port.

According to Cui, the SAR’s next opportunity would be the internationalization of the mainland’s bond market as Hong Kong’s bond market is still relatively small compared with the stock market, while the bond market is an indispensable component of listed companies. She recalled that the mainland issued 12 trillion yuan ($1.7 trillion) worth of bonds last year, exceeding the volume of funds raised in the equity market. CCB International Securities estimates the mainland’s bond market has reached 58 trillion yuan, and the figure will double by 2020.

tingduan@chinadailyhk.com

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