Charles Li, CEO of the Hong Kong Stock Exchange: vigorously develop the fixed income and currency markets and cultivate a product ecosystem.

Recently, the CEO of HKEX, Laura Cha, wrote a blog post titled "New Year, New Journey". She stated that HKEX has established a diverse product ecosystem and is continuing to strive for further developments. In order to further connect capital and opportunities, HKEX will focus on expanding the fixed income and currency markets, cultivating a similarly rich product ecosystem in this asset class. HKEX has just announced a partnership with CMU Settlement Limited (CMU Settlement) to enhance Hong Kong's post-trade securities infrastructure, supporting the long-term development of Hong Kong's fixed income and currency product ecosystem. CMU Settlement assists the Hong Kong Monetary Authority in operating the Central Moneymarkets Unit (CMU), which is Hong Kong's central securities depository platform, holding assets worth $610 billion. She also mentioned that since the second half of last year, the securities market has become more active, reaching new highs in trading volume. Global investors continue to show a strong interest in investing in China, and when the time is right, they still prefer to seize China's growth opportunities through the Hong Kong market, which is why HKEX's daily trading volume reached new highs last year. Additionally, mainland Chinese investors are increasingly active in the Hong Kong market, as evidenced by the 55% increase in daily trading volume through the Stock Connect program in 2024. Significant funds from mainland China are also seeking diverse investment opportunities. Laura Cha emphasized that HKEX has unique advantages in connecting China with the world as the core market infrastructure of the Hong Kong capital market. They have established a unique market connectivity mechanism and are actively pursuing a diversification strategy to strengthen their resilience to market fluctuations and position themselves for future opportunities. They have built a diverse product ecosystem and continue to work towards further developments. Looking ahead, their diversification strategy will focus on the fixed income and currency (FIC) markets. Over the years, through the equity market and equity derivatives, they have provided investors with one-stop trading and risk management services. With the continuous development of products to meet the evolving needs of global investors, they have built a rich securities product ecosystem. In order to further connect capital and opportunities, they will focus on developing the fixed income and currency markets to cultivate an equally rich product ecosystem in this asset class. In the past decade, the fixed income market in mainland China has rapidly grown, with a current size of $24.6 trillion, ranking second globally. With the support of policies, HKEX anticipates continued rapid growth in the mainland fixed income market, as well as increased connectivity between onshore and offshore fixed income markets. This will bring new opportunities for global investors to share in China's growth dividends. HKEX has been actively developing their fixed income and currency markets to provide a platform for global investors to participate in these opportunities. Diversified investor groups are essential in building market liquidity and resilience. Bond Connect has become an important channel for international investors to enter the mainland Chinese fixed income market, with daily trading volumes through the Northbound Connect program reaching new highs each year since its launch in 2017, laying a solid foundation for the development of the fixed income market in Hong Kong. Just as the development of the stock market relies on stock derivatives, the prosperity of the bond market also depends on the development of fixed income derivatives. A key element of the fixed income market is a well-functioning derivatives market that allows investors to effectively manage risks. Therefore, HKEX offers a variety of currency futures, and has established a financial infrastructure for clearing services for interest rate and currency derivatives for off-exchange trading, actively participating in the construction of Swap Connect to connect onshore and offshore markets. With the significant contribution of Swap Connect, the off-exchange clearing volume has grown rapidly in recent years, reaching a historical high in 2024 with a nominal value of $1.19 trillion, a 142% increase from 2023. HKEX is also committed to continually enriching risk management products, starting in January this year by allowing foreign investors to use onshore government bonds and policy financial bonds held in the Bond Connect as collateral for Northbound Swap Connect, and is currently preparing to launch Chinese government bond futures in Hong Kong. Today, HKEX has reached a new milestone in the development of Hong Kong's fixed income and currency ecosystem by announcing a partnership with CMU Settlement Limited.To enhance Hong Kong's post-trade securities infrastructure, supporting the long-term development of Hong Kong's fixed income and currency product ecosystem. Euroclear is responsible for assisting the Hong Kong Monetary Authority in operating the Central Money Markets Unit (CMU) for debt securities, which is Hong Kong's central securities depository for fixed income, holding assets worth $610 billion.Our cooperation will become a key driving force for future market development. We hope to provide investors with more diverse liquidity management tools, enhance the attractiveness of RMB bonds, and promote RMB internationalization. The development of the bond spot market and derivatives market will unleash a powerful flywheel effect. The liquidity of futures and swaps markets will enhance price discovery capabilities, reduce financing costs, and increase liquidity in the bond issuance market, creating a sustainable growth cycle for the fixed income and currency ecosystem. Developing the fixed income and currency markets requires long-term effort, but the cooperation announced today is an important breakthrough. It brings us closer to building a complete fixed income product ecosystem, and we believe that the formation of this ecosystem will further enhance Hong Kong's position as an international financial center, global risk management hub, and offshore RMB gateway. Embarking on a new journey It has been several weeks since the end of the World Economic Forum in Davos, and international situations are changing rapidly. Regardless of how the world changes, our development must have a long-term perspective. Looking ahead, China's economic growth will continue to bring huge opportunities to global markets, and the connection between capital and opportunities will be an eternal theme in capital markets. We believe that building a rich ecosystem of China-related products covering all asset classes will create conditions for global capital to seize this historic opportunity and support the continued development of the Chinese economy. Hong Kong, as an international financial center, is the most powerful place to build this ecosystem and continue its brilliant trajectory. We are ready. Now, let us embark on a new journey towards new goals!