As Hong Kong Exchanges and Clearing celebrates its 18th anniversary, the government announces its shareholding in the company has been increased to 6 percent through scrip dividend election.
Market analysts see the move as bringing the government and the stock exchange even closer together.
HKEx was formed by the amalgamation of four privately-run securities and futures exchanges through the Merger Ordinance, which also gave the government control.
In 2007, the government started to take up HKEx shares too. The shareholding reached 5 percent eventually and was strategically important.
At that time, securities exchanges around the world were targets for acquisitions and mergers, and there was a worry that if HKEx fell into the hands of an outside party the SAR's development as a financial hub would be affected.
And since the government has statutory power to regulate HKEx and to appoint directors, taking up the company's shares reinforces control. That has been enhanced by the latest shareholding increase, particularly as the regulatory regime does not permit anyone else to hold more than 5 percent of shares.
Most blue chips offer shareholders the options of receiving dividends in cash or in shares. Those who don't have immediate need for cash and are bullish about a company can choose the second option and receive additional shares at the market value on a designated date.
Someone used Cheung Kong as an example and calculated the cumulative compounded growth in the value of the company's dividend in shares since it was first listed is as high as 1,500 times.
When then financial secretary John Tsang Chun-wah bought HKEx shares, the cost was about HK$148 per share. The price has since doubled, and I must say the return has been rather handsome.
As the public coffers are cash rich and since HKEx has numerous development plans and stable prospects, it makes sense the government is taking HKEx dividends in shares. That's wise both from a control as well as a return on investment perspectives.
Siu Sai-wo is publisher of Sing Tao Daily