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Haikou Jiangdong New Area
Company

HKEX has its journey on listing for 20 years, connecting China and world

June 28, 2020


Abstract : Hong Kong Exchanges and Clearing Limited (HKEX) marked its 20th anniversary as a publicly listed company last Friday. Connecting China and the world, its journey has defined who it is today, and it is looking forward to the next 20 years.

HKEx.png

Photo: The file photo shows the Hong Kong Exchanges and Clearing Limited (HKEX).

HONG KONG, June 28 (Xinhua) -- Hong Kong Exchanges and Clearing Limited (HKEX) marked its 20th anniversary as a publicly listed company last Friday. Connecting China and the world, its journey has defined who it is today, and it is looking forward to the next 20 years.

-- Great progress for 20 years

Data shows that HKEX has surged by nearly 43 times in market capitalization since going public in Hong Kong 20 years ago. As a public company, HKEX's market capitalization currently stood at 375.53 billion Hong Kong dollars (about 48.46 billion U.S. dollars) on June 12, up from 8.59 billion Hong Kong dollars at the end of 2000, according to a HKEX statement. The revenue of HKEX jumped by more than six times to 16.31 billion Hong Kong dollars over the past two decades.

The HKEX also witnesses the growing development of the Hong Kong stock market. There were 2,482 listed companies on the HKEX at the end of May 2020, with total capitalization of 33.98 trillion Hong Kong dollars, while there were 790 companies worth 4.86 trillion Hong Kong dollars at the end of 2000.

The HKEX topped the global IPO league seven times in the past 11 years. The exchange has become the largest structured product market and the second largest biotech fund-raising center in the world. The London Metal Exchange (LME) owned by HKEX is the world's largest industrial metal market.

With closer mainland-Hong Kong financial ties, the Stock Connect has also enjoyed great popularity among investors, with the daily northbound trading at 78 billion yuan (about 11 billion U.S. dollars) on average in the first quarter of 2020, and 21.6 billion Hong Kong dollars for southbound trading.

The daily trading of Bond Connect, a program that allows overseas investors to buy mainland bonds, stood at 19.3 billion yuan also in the first quarter.

-- Premier League

HKEX's Premier League era began in 2000 when it was demutualised, like many other leading global exchanges around the world, to become a public company with the iconic stock code "388". It was also at this time that it brought the futures exchange and clearing houses under one roof to create the HKEX family, according to Charles Li, chief executive of HKEX.

HKEX has made efforts to adapt to operating as a public company, with cash and derivatives, trading with clearing, and building-out of the IT infrastructure. One of the most important transformations was to reconcile new and statutorily-provided public interest and investor protection obligations, with the leadership responsibility to develop a competitive market, said Li.

Those efforts set the stage for three major breakthroughs over the last 10 years. The acquisition of the LME in 2012 brought commodities to its stable and signalled its international ambitions; the creation of Stock Connect and Bond Connect between 2014 and 2017 was a mutual market access breakthrough; and the launch of the new listing regime in 2018 to welcome new economy and biotech issuers brought far greater listed company diversity to the markets, according to Li.

"Our share price grew, along with our market capitalisation, making us one of the largest listed companies in Hong Kong and one of the largest market infrastructure and exchange groups globally; at the same time, our initial public offering (IPOs) fundraising has made us the world leader in seven of the last 11 years, and our structured products market has been the largest in the word for more than a decade. Both signs of our increased global stature," said Li.

-- Future growth

Li stressed, despite difficulties and challenges ahead, China and the rest of the world need each other. These difficulties may slow down the internationalisation of the RMB and the opening of China's financial markets, but China is on an irreversible track to be more closely integrated with international markets. Hong Kong, and HKEX in particular, will continue to play a critical role of connector, translator, and bridge between China and the world. The HKEX's role has never been more relevant or more important.

He pointed out that the HKEX Strategic Plan 2019-2021 sets out the vision - to be China anchored, globally connected, and technology empowered. The HKEX is not only aiming to be the most important financial market leader in the Asia time zone, but also aspiring to remain the critical juncture where China embraces the world and the world embraces China.

"We have achieved a lot already but we dream of even greater things in the future," said Li.

With NetEase's secondary listing in Hong Kong recently, more U.S.-traded Chinese mainland companies will likely set out on their own homecoming journeys, casting a vote of confidence for the global financial hub.

Analysts added that the return of companies listed overseas is also a boon to fortifying investor confidence on Hong Kong. (Contributed by Li Binbin, edited by Hu Pingchao with Xinhua Silk Road, hupingchao@xinhua.org)

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Keyword: stock market HKEx

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