HKEX: Hong Kong ETF market liquidity ranks third globally, ETP asset management scale soared to HKD 653 billion.

Jean-Francois Mesnard-Sense, Senior Vice President of the Securities Product Development Department at Hong Kong Exchanges and Clearing Limited (00388), stated that the liquidity of the Hong Kong ETF market ranks third globally. From the beginning of the year until September 30, the average daily trading volume of Hong Kong ETFs was HK$37.8 billion, surpassing the fourth-ranked South Korea. In terms of the Hong Kong ETP market, product innovation has driven a significant increase in asset management scale and the number of listings has reached a historical high. As of September 30 this year, the asset management scale of the Hong Kong ETP market has grown by 32% year-on-year to HK$653 billion, and the number of ETPs has increased by 16% to 225 per year. Regarding the increase in average daily trading volume of ETFs, he pointed out that the growth is mainly driven by three major factors, including improving market structure, enhancing connectivity, and continuous innovation. In terms of improving market structure, HKEX has implemented many measures to make the market more efficient, promote more liquidity, and cited the introduction of market makers in November last year for the trading of exchange-traded funds and leveraged and inverse products during pre-market and closing auction sessions. He further stated that in enhancing connectivity, HKEX has increased its connections with the Middle East in recent years and connectivity with some ASEAN markets is also increasing, with connectivity still being crucial to the growth of the Hong Kong ETF market. In terms of continuous innovation, HKEX has been introducing different products to the ETF market, such as covered call options ETFs and recently introduced single stock leveraged and inverse products. He mentioned that the above three factors will help HKEX reach new heights in relevant areas. Looking ahead, HKEX will continue to innovate, meet customer demand, and introduce suitable products to the market. He mentioned that as of the 16th of this month, HKEX has welcomed 41 new ETPs by 2025, surpassing the historical record of ETP issuances last year. In terms of income-based ETFs, there are currently 21 products, consisting of equity income ETFs, covered call option ETFs, and bond ETFs. As of September 30 this year, the average daily trading volume of income-based ETFs has increased to over HK$200 million and the asset management scale of income-based ETFs has increased to approximately HK$23.4 billion. In terms of leveraged and inverse products, there are currently 29 products with a total market value of approximately HK$28 billion, accounting for 4.3% of the overall ETP market. The average daily trading volume is HK$3.6 billion, accounting for 9.5% of the entire ETP market.