The Hong Kong Stock Exchange (00388) announced on April 24 that it appointed Tang Jiacheng to replace Laura Shi as chairman of the board of directors. In accordance with the Articles of Association of the Hong Kong Stock Exchange and the Securities and Futures Ordinance, the appointment of Mr Tong is subject to the written approval of the Chief Executive, John Lee, before it can take effect.
(Mr Tong took over as Chairman of Hong Kong Exchanges and Clearing Limited.)
Source: HKEX)
A review of Mr Tong's resume reveals that the 69-year-old holds a number of positions, including an independent non-executive director of the Hong Kong Stock Exchange, MTR and Standard Chartered, a non-official member of the board of directors of the Hong Kong Investment Management Corporation, and the chairman of the Task Force on Promoting Liquidity in the Stock Market, a member of the Listing Policy Group, and a member of the Judicial Officers Recommendation Committee.
In fact, the latest performance of the Hong Kong Stock Exchange is not optimistic. Affected by various uncertainties such as geopolitics and interest rate changes, in the first quarter of 2024, the operating income and net profit of the Hong Kong Stock Exchange fell by 6% and 13% year-on-year respectively, and liquidity continued to be sluggish, and the global IPO ranking fell to 10th in the first quarter......
In this context, the market has also begun to look forward to how Tong Ka-shing can lead the Hong Kong Stock Exchange and Hong Kong stocks to see the light of day.
01
Tang Jiacheng with rich experience
Tong Ka Shing, an academician of the Hong Kong Academy of Finance, is a veteran with extensive experience.
He was twice the Chairman of the SFC in October 2012 and 20 October 2015. During his tenure, the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect were launched in 2014 and 2016 respectively, the Mainland-Hong Kong Mutual Recognition of Funds arrangement was implemented in 2015, and new regulations on IPO supervision in the Hong Kong securities market were promulgated, so that the responsibilities of the Hong Kong Securities and Futures Commission are no longer limited to the back-end supervision in the past, but have the right to participate in more direct "front-loading supervision".
Mr Tong is also well associated with the Hong Kong Stock Exchange, having served as a member of the Main Board and GEM Listing Committees of The Stock Exchange of Hong Kong Limited (the "Exchange") from 2002 to 2006 and as Chairman from 2006 to 2008.
In August last year, the HKSAR Government appointed Mr Tong Ka-shing as the Chairman of the Task Force on Enhancing Stock Market Liquidity to submit recommendations to the Chief Executive for improving stock market liquidity.
The industry generally believes that Tong Ka-shing is the ideal candidate for the chairman of the Hong Kong Stock Exchange.
Chan Chi-wah, President of the Securities and Futures Association, pointed out that Tong Ka-shing's extensive experience as a regulator, as well as his extensive experience and outstanding professional capabilities in the financial industry, believe that he can promote the future development of the Hong Kong Stock Exchange and the success of the entire financial industry, and write a new chapter for the securities industry.
Former Secretary for Commerce and Economic Development, Frederick Ma, who has repeatedly refuted the theory of "Hong Kong's international financial center site" in public, also said that with Tong Kar-shing's background and experience, he is definitely an ideal candidate for the chairman of the Hong Kong Stock Exchange, and believes that he can lead the Hong Kong Stock Exchange to consolidate Hong Kong's status as an international financial center.
02
The challenges are enormous
As Tang said, "The Exchange is well aware that it is in an ever-changing operating environment where challenges and opportunities coexist. "HKEX faces many challenges.
According to the financial report disclosed on April 24, in the first quarter, the revenue and other income of the Hong Kong Stock Exchange was HK$5.20 billion, down 6% year-on-year, the net profit attributable to the parent company was HK$2.97 billion, down 13% year-on-year, and the main business income fell 7% year-on-year to HK$4.66 billion. According to HKEX's analysis in the report, the decrease in trading and settlement fees was mainly due to the decrease in average daily turnover, the decrease in net investment income from margin and clearing house funds, and the decrease in listing fee income.
(HKEX Financial Report)
A total of 73 companies were listed in 2023, down 19% from 2022, raising a total of HK$46.3 billion, down 56% from 2022. In the first quarter of this year, Hong Kong's ranking in the world in terms of IPO proceeds also fell to 10th, which also raised public concerns, and the most urgent task at present is how to improve market liquidity.
03
Positive signals are emerging
Despite the "cold" cash market, the derivatives market and commodity market performed strongly in the first quarter, hitting a new quarterly high, up 12% and 6% from the fourth quarter of 2023 and the first quarter of 2023, respectively.
In addition, since March, the average daily trading volume of Hong Kong stocks has been below HK$100 billion for six consecutive months, and finally returned to above HK$100 billion, indicating that investor confidence has recovered.
Since April 19, the China Securities Regulatory Commission (CSRC) issued five measures for capital market cooperation with Hong Kong, Hong Kong stocks have risen sharply day after day. It is reported that the Hang Seng Index opened 57 points lower this morning (25th) and then turned up, once rising nearly 240 points, and reported 17284 points for the whole day, up 83 points or 0.5%, hitting a new closing high in the past five months. The turnover on the main board was nearly 119.9 billion yuan.
(Hong Kong stocks hit a high this year)
In addition, Nomura, Citigroup and UBS also raised their target prices on the Hong Kong Stock Exchange. UBS pointed out that the China Securities Regulatory Commission announced five measures to support Hong Kong's capital market earlier, which is believed to help the sentiment of Hong Kong stocks, but it still needs to be patient with the actual help of the Hong Kong Stock Exchange.
04
Be proactive in every opportunity
On April 15, Tang Jiacheng said in an interview with the media that Hong Kong's stock spot trading was soft due to external influences last year, but Hong Kong's financial market has long been no longer relying on stock trading alone, and it is advisable to trade derivatives and ETFs against the market to create new high opportunities and seek diversified development strategies.
He also knew that the Hong Kong Stock Exchange and the Securities and Futures Commission of Hong Kong attach great importance to this work, and are studying many medium- and long-term reform proposals, and believe that measures will be introduced in the future to improve the market mechanism and promote market development. When the Hong Kong Stock Exchange announced that Tong Ka-shing would take over the baton, he said, "Although we cannot control external factors such as geopolitics and interest rate changes, we must proactively grasp every opportunity in the future, and strive to further enrich the product ecosystem, strengthen infrastructure construction, and enhance market competitiveness." ”
Text | Shu Zhiyong
Director of the Financial Media Center of the Hong Kong Economic Herald
This article is an original manuscript produced by the Hong Kong Economic Herald
Reproduction is subject to authorization and the source is indicated