Paul Chan emphasizes need to promote HK market and explore more diversified funding sources

The Financial Secretary, Paul Chan, stated in a blog post that the Federal Reserve reduced interest rates by 0.5 percentage points last week. Under the linked exchange rate system, it is expected that future interest rate trends in Hong Kong will largely follow U.S. interest rates. However, the speed and extent of adjustments will depend on local capital flows and market conditions.

Chan noted that the Hong Kong stock market has rebounded, with the Hang Seng Index closing at 18,258 points last Friday, accumulating nearly an increase of 7% over six consecutive trading days. Market trading activity has also improved, with a transaction value of HK$176.8 billion last Friday, the highest in nearly four months.

The new stock market is also showing signs of recovery. A major new stock listed last week raised HK$31 billion, making it the second-largest IPO globally this year. The total IPO capital raised in Hong Kong this year has already surpassed the total for the previous year, climbing to fourth place globally. In addition to the new stock market, financing activities by listed companies have also become active, with over US$20 billion raised this year.

Chan mentioned that Hong Kong continues to witness net capital inflows, with total bank deposits increasing by about 4% to HK$16.8 trillion in the first seven months of this year compared to the end of last year. Given the gradually improving external environment, there is a need to further promote the Hong Kong market and explore broader and more diversified sources of funding.

Chan has embarked on a trip to Europe to attract investment, visiting Madrid, Spain, and London, England. In addition to meeting with representatives from local government and business sectors, he will also attend a series of dinners and roundtable meetings to highlight Hong Kong's advantages. Furthermore, he will lead a delegation to the Middle East to promote deeper and broader exchanges and cooperation at the end of next month.

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