Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Factbox-Major finance milestones as Hong Kong marks 25 years since handover

Stock Markets Jun 28, 2022 12:07AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A general view of Two International Finance Centre (IFC), HSBC headquarters and Bank of China in Hong Kong, China July 13, 2021. REUTERS/Tyrone Siu/File Photo

HONG KONG (Reuters) - Hong Kong returned to China in 1997 after 156 years of British colonial rule. Here are some major milestones for the city's financial markets:

HONG KONG DOLLAR TRADING BAND

The Hong Kong dollar was pegged to the U.S. dollar on October 17, 1983, with a trading band of between 7.75 and 7.85 per US dollar imposed since 2005. The Hong Kong Monetary Authority (HKMA), the city's de-facto central bank, regularly enters the market to buy or sell the currency to keep it within the band.

DUAL HONG KONG AND MAINLAND LISTINGS

Industrial and Commercial Bank of China became the first company to execute an IPO simultaneously in Shanghai and Hong Kong in 2006 when it issued A-shares and H-shares to raise US$21.9 billion, the largest deal in the world at the time.

STOCK, BOND AND WEALTH CONNECT

Shanghai-Hong Kong Stock Connect was created in 2014 to provide mutual access between the equity markets of Hong Kong and mainland China. Two years later, the programme was expanded to Hong Kong and Shenzhen Stock Connect, which allowed mainland investors access to smaller companies in Hong Kong and international investors access to new economy companies listed in Shenzhen. The connect programmes now cover about 2000 stocks, according to Hong Kong's Securities and Futures Commission (SFC). In May, China's securities regulator agreed to include exchange-traded funds (ETFs) in stock connect programmes with Hong Kong.

In 2017, Bond Connect was launched to replicate the equity schemes and allow foreign investors to invest via Hong Kong in China's multi-trillion bond market. The Northbound Bond Connect has become a major channel for foreign investors seeking access to China's bond market. In September last year, China said it would permit its investors to trade offshore debt with the opening of the "Southbound" leg of its Bond Connect channel.

Wealth Management Connect launched in September 2021, linking China's southern province of Guangdong with Hong Kong and Macau, to allow cross-border funds management. The programme enables residents of Hong Kong and Macau to buy mainland investment products sold by banks in the Greater Bay Area, while allowing residents of nine Guangdong cities to buy those sold by banks in the two offshore centres.

WEIGHTED VOTING RIGHTS

Hong Kong Stock Exchange announced in 2018 https://www.reuters.com/article/uk-hkex-regulation-idUKKCN1G70VS it would allow companies with dual-class shares – or weighted voting rights – if they are considered to be "innovative", in a move designed to facilitate listings from emerging business sectors. The decision was described by the law firm Skadden as the most significant change to Hong Kong's listing rules in 20 years.

WAVE OF SECONDARY LISTINGS

The weighted voting rights changes in 2018 prompted a wave of secondary - or homecoming listings - which kicked off with Alibaba (NYSE:BABA) Group in November 2019. The Jack Ma-founded e-commerce giant raised $12.9 billion in the deal that was the largest share sale in Hong Kong at the time for nine years. Since then, 18 companies have raised $42.3 billion, according to Refintiv data. The pace of homecoming listings has remained strong as Chinese companies trading in New York prepare contingency plans as U.S authorities press ahead with delisting firms that don't meet regulators' auditing requirements.

FUTURES

HKEX launched its MSCI A-share index futures product in 2021, an attempt to meet demand from investors in Chinese stocks for hedging tools at a time of surging volatility.

SPECIAL PURPOSE ACQUISITION CORPORATIONS (SPACs)

Hong Kong Stock Exchange allowed Special Purpose Acquisition Corporations (SPACs), known also as blank cheque companies, to start trading from January 1, 2022, in line with most other major markets in the world.

However, tight restrictions on the type of investors which could buy into the SPACs and banning retail participation dented demand for the products along with the current bout of market volatility.

Only two SPACs have listed since the start of the year.

Factbox-Major finance milestones as Hong Kong marks 25 years since handover
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
John Laurens
John Laurens Jun 28, 2022 12:01AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sad that those amazing people are now so demoralized.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email