Xu Zhengyu: Since the beginning of this year, both the "quality" and "quantity" of the Hong Kong financial market have shown good momentum.

On October 27, Hong Kong's Secretary for Financial Services and the Treasury Christopher Hui released a blog post pointing out that Hong Kong's financial market has shown a promising development momentum in terms of "quality" and "quantity" so far this year. In the first three quarters, the average daily turnover of the Hong Kong stock market reached 256.4 billion Hong Kong dollars, a significant increase of 1.26 times year-on-year. The total funds raised in the IPO market reached 182.9 billion Hong Kong dollars, an increase of 2.29 times. Hui pointed out that the increase in "quantity" has led to a transformation in "quality", with international investors viewing Hong Kong as a gateway for investing in cutting-edge technology in Mainland China and as a safe haven amidst geopolitical turmoil, increasing their investments in the Hong Kong market. Hong Kong has continued to rank third in the Global Financial Centres Index and first in the Asia-Pacific region, narrowing the gap with the top two markets and demonstrating the international financial community's confidence in Hong Kong. Following the announcement of plans to relocate to Hong Kong by several large institutions, the first company relocation application was approved last week, helping companies optimize their structures and enhance operational efficiency, enjoying Hong Kong's simple tax system and high-quality professional services. The market has responded actively, with frequent applications and inquiries, and Hui believes that more high-quality companies will continue to relocate to establish their decision-making and management centers in Hong Kong, expanding their business operations. The Policy Address actively seeks to attract more Mainland enterprises to use Hong Kong as a platform for "going global", creating business opportunities and economic benefits. The recent Fourth Plenum of the 20th Central Committee made systematic plans and strategic deployments for the economic and social development of China during the 14th Five-Year Plan period, further deepening the reform of state-owned assets and enterprises, and promoting the strengthening, optimization, and expansion of state-owned enterprises and state-owned capital. Hui stated that Hong Kong can leverage its unique advantages to assist state-owned enterprises in their international expansion and the expansion of international business. The Companies Registry has appointed dedicated staff to coordinate applications for Mainland enterprises to register in Hong Kong, streamline the process, and accelerate approval. After Mainland enterprises are registered, there will be a focus on improving cross-border settlement, remittance, and financing services, with the financial center becoming a key platform. The Hong Kong government plans to complete research on optimizing tax concessions in the first half of next year to attract more Mainland enterprises to establish finance centers in Hong Kong. Furthermore, the Policy Address proposes optimizing the rules for listing structured products, and the Hong Kong Exchanges and Clearing has issued a consultation paper aimed at enhancing market competitiveness and efficiency while strengthening investor protection. The structured products market in Hong Kong has performed well, leading global transaction volumes for 17 consecutive years, with daily average transaction volumes recently exceeding 20 billion Hong Kong dollars. Proposed optimizations such as lowering the minimum issue price for derivative warrants and adjusting the market value threshold for ETF underlying securities will enhance the flexibility of issuers, promote interaction between ETFs and the structured products ecosystem, and drive continued market development. Hui mentioned that Hong Kong serves as a hub for issuing Asia's international bond arrangements, accounting for nearly 30%, and has ranked first in the region nine times in the past ten years. The Securities and Futures Commission and the Hong Kong Monetary Authority jointly issued a "Roadmap for Development of Fixed Income and Money Markets" last month, outlining ten initiatives to further attract issuers to use Hong Kong as a fundraising hub, provide risk management and liquidity management tools for issuers and investors, and promote the growth of offshore renminbi use and liquidity, as well as new generation financial infrastructure. The People's Bank of China also announced various support measures, including supporting overseas institutional investors in conducting repurchase transactions in the Mainland bond market, increasing the daily trading limit for the "Bond Connect" by more than double to 45 billion yuan, accelerating financial market interconnection, injecting strong momentum into the Hong Kong fixed income and money markets. Hui also mentioned that amidst the current global geopolitical and market fluctuations, gold continues to be an important safe haven asset. In the second quarter of 2025, global total demand increased by 45% year-on-year in terms of value, reaching 132 billion US dollars. The holdings of gold ETFs have risen from around 2,600 tons at the beginning of the year to nearly 3,000 tons, indicating strong investor demand. The Hong Kong government is actively promoting the establishment of an international gold trading market, expanding storage facilities, establishing a Hong Kong Gold Central Clearing System, and supporting the establishment of a gold industry association. The ecosystem for commodity trading is also increasingly perfected, with the number of London Metal Exchange-recognized delivery warehouses increasing from 8 to 12, consolidating Hong Kong's position as a financial, shipping, and trading center. The Financial Services and Treasury Bureau of Hong Kong will continue to hold international financial events, such as the upcoming 10th Hong Kong FinTech Week, the ASIA Financial Forum in late January next year, and the YU ZE Hong Kong Summit in late March, bringing together global financial leaders and innovative enterprises to discuss cooperation and innovative opportunities, enhance Hong Kong's international influence, and promote investment and business expansion. Looking ahead, the Financial Services and Treasury Bureau of Hong Kong will continue to efficiently promote the various measures of the Policy Address, strengthen Hong Kong's position as an international financial center through policy innovation and resource allocation, combine a proactive government with an efficient market, explore new emerging financial sectors, and inject a continuous stream of growth momentum into the Hong Kong economy.