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Following is the speech by the Chief Executive, Mr C Y Leung, at the Hong Kong Exchanges and Clearing Limited (HKEX) 16th Anniversary Cocktail Reception this evening (June 28):
C K, Charles, distinguished guests, government colleagues, ladies and gentlemen,
Good evening. I am pleased to join you here, celebrating the 16th anniversary of the Hong Kong Exchanges and Clearing Limited. Happy birthday, and sweet 16, as Neil Sedaka's old pop song goes.
But for now, let me leave aside music and lyrics, and turn to a perhaps weightier topic - the economy. It is true that the global economy has had its ups and downs over the past year or so. Much, indeed, remains uncertain. In particular, Britain's exit from the European Union has triggered off substantial volatility in the financial markets.
That said, I have every faith and confidence in Hong Kong's businesses and investors in turning challenges into new opportunities. Our Government and financial regulators had been prepared for the possibility of Brexit. Stringent stress tests were conducted. Sufficient liquidity is in the system. The Hong Kong dollar exchange rates and interest rates remain stable. And we will continue to monitor the situation closely.
The resilience of our financial system reflects the strong foundation of the Hong Kong economy. We are in the right neighbourhood - Asia fairs generally better than other regions. In 2015-16, the Hong Kong Government collected record-high profits tax, without increasing the tax rate, amounting to $140 billion - a good indicator of business performance in general. And thank you for paying your tax.
Hong Kong is also the world's most competitive economy, according to the latest World Competitiveness Yearbook by Switzerland's International Institute for Management Development. In the World Investment Report released just last week, the United Nations Conference on Trade and Development placed Hong Kong second in global foreign direct investment inflows, which saw a year-on-year surge of over 50 per cent.
Our financial sector continues to be in a strong position. Last year, Hong Kong's stock market raised $260 billion through IPOs, ranking first globally. More than 1 800 companies are now listed in Hong Kong. That includes companies from the Mainland of China and overseas, all attracted to Hong Kong by our market liquidity, access to global investors and investment opportunities.
For this, we certainly have the "one country, two systems" arrangement to thank. As part of China, we enjoy preferential access to the Mainland market - and so the "one country" advantage. At the same time, we are an international city with a separate social, economic and legal system, using English and Chinese as our official languages - therefore the "two systems" advantage. These advantages combined, we have become the "super-connector" between the Mainland of China and the rest of the world. And we "super-connect".
Certainly in capital markets. For one, the Shanghai-Hong Kong Stock Connect is exemplary of our "super-connector" role. A similar link with Shenzhen is in the works. We will strive to launch the Shenzhen-Hong Kong Stock Connect within this year, as announced by Premier Li Keqiang earlier in March.
We "super-connect" in the currency futures market as well. This February, the open interest of physically delivered US dollar-Renminbi currency futures reached a record-high of 32 000 contracts. This financial offering, I am pleased to say, was the world's first deliverable Renminbi currency futures product quoted, margined and settled in Renminbi. Last month, the HKEX launched new Renminbi currency pairs against the Japanese yen, the Euro and the Australian dollar to facilitate currency hedging.
Turning to the commodities market, Hong Kong's offerings expanded following the launch last December of the London Nickel Mini Futures, the London Tin Mini Futures and the London Lead Mini Futures.
All these, and a great deal more, are testament to the HKEX's contribution in enhancing Hong Kong's status as an international financial centre.
And we are seizing every opportunity to strengthen and expand our role. That certainly includes the country's Belt and Road Initiative. As Mr Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress, said at last month's Belt and Road Summit, Hong Kong stands to play a key role in Belt and Road developments, being China's global financial centre and the world's China financial centre.
With one of the world's largest stock markets, Hong Kong will continue to be the go-to centre for Mainland Chinese and regional companies looking to raise capital when they "go global".
As the world's largest offshore Renminbi business hub, and one of the global centres for asset management, risk management and corporate treasury functions, Hong Kong has much to offer - in enabling capital flows, promoting the Renminbi's internationalisation, as well as investment and financing for countries along the Belt and Road.
Yes, we are exploring new horizons. At the same time, the Hong Kong Government will continue to ensure that our regulatory system is up to date, efficient and user-friendly.
Let me thank everyone at the HKEX, as well as our financial service professionals, for their hard, and smart, work over the past year.
Thank you.
Ends/Tuesday, June 28, 2016
Issued at HKT 19:16
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