Hong Kong Financial Secretary Paul Chan States Positive Market Trends
Hong Kong Financial Secretary Paul Chan Mo-po stated yesterday (15th) in his blog that despite the ongoing uncertainty in the external economic environment, the Hong Kong stock market has continued to recover since the beginning of this year. The Hang Seng Index has risen by over 3,800 points, an increase of 20%, outperforming major global stock markets. The average daily turnover has also increased year-on-year to HKD 242 billion, indicating significant improvements in market liquidity and investment sentiment.
Chan pointed out that the Hong Kong stock market is showing clear signs of strengthening. As of the end of May, the total amount raised by new stocks approached HKD 79 billion, ranking among the top globally, while the refinancing scale exceeded HKD 150 billion. A considerable amount of capital from Europe, America, the Middle East, and Asia is accelerating its inflow into the Hong Kong stock market. Various signs indicate that international investors’ confidence in Hong Kong’s financial system is increasing. In addition to strong performances in the stock market and asset management, Hong Kong has also seen significant developments in digital finance, green finance, and the offshore RMB market.
Hong Kong Expected to Become the World’s Largest Cross-Border Asset Management Center
According to Chan’s blog, Hong Kong has recorded a net inflow of over USD 44 billion this year, with a year-on-year increase of 285%. The number of registered funds has increased to 976. Chan anticipates that Hong Kong is likely to become the world’s largest cross-border asset management center within the next two to three years. Many cornerstone investors in large new stock fundraising efforts come from Europe, America, the Middle East, and other regions in Asia, and the trend of increased capital allocation in Hong Kong stocks from these areas is becoming more evident. Additionally, bank deposits continue to rise, and interbank borrowing rates remain low. The flow of funds confirms that international investors’ confidence in Hong Kong’s financial market is further strengthening.
Ten Virtual Asset Exchanges Granted Licenses
Since Hong Kong first issued its digital asset policy declaration at the end of 2022, ten virtual asset trading platforms have received licenses, with eight more currently under review. Last year, the total transaction value related to digital assets conducted by local banks in Hong Kong reached HKD 17.2 billion, and the total custody amount also reached HKD 5.1 billion.
The Hong Kong Financial Secretary is preparing to publish a second digital asset policy declaration, proposing a new direction that combines traditional financial services with technological innovation. This includes enhancing the security and flexibility of digital asset applications in the real economy and encouraging Hong Kong and international companies to explore innovative potential.
Stablecoin Legislation Passed to Attract More Capital to Hong Kong
The stablecoin legislation in Hong Kong has passed legislative approval and will officially take effect on August 1. The legislation establishes a licensing system for the issuance of “fiat-backed stablecoins.” It is estimated that the global stablecoin market is worth approximately USD 240 billion, with last year’s trading volume exceeding USD 20 trillion. Chan stated that as a major global financial center, promoting the development of the stablecoin system will help enhance payment efficiency and provide more innovative space for the market.
Chan mentioned in his blog that stablecoins have advantages such as price stability, decentralization, and programmability, which can facilitate the automation of financial processes and improve transaction efficiency in the real economy. After the new financial regulations are implemented, the Hong Kong Monetary Authority will expedite the approval of applications from institutions wishing to issue stablecoins in Hong Kong to attract businesses from various countries and regions.
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and prices can be highly volatile, leading to the potential loss of your entire principal. Please assess the risks carefully.