Hong Kong should enable the Connect scheme to include more international companies listed in Hong Kong so that mainland investors can safely access international leaders through its market, said the newly appointed Financial Services Development Council executive director, Rocky Tung Yat-ngok.
Tung proposed adjusting the Stock Connect rules metrics through dialogue with index providers and mainland regulators, given that the current rules are heavily weighted toward Hong Kong-specific metrics, such as market capitalization, float, and velocity, which disadvantage secondary listings and many dual primary listings. He said Hong Kong-listed international companies can therefore realistically access Southbound demand and would significantly strengthen Hong Kong's appeal as an international listing and capital-raising venue.
Tung said Hong Kong should make its listing regime and market access more convincing and user-friendly for international companies and the FSDC will target outreach to emerging and high-potential markets, such as Indonesia, Southeast Asia, and the Middle East, where many strong companies with a smaller market capitalization may not be huge globally but are regional leaders, noting that secondary listings could be particularly attractive to these firms.
He pointed out that the government should enhance the bond market's role as a safe haven to retain capital during equity market volatility and reduce outflows, thereby bridging funding gaps for large-scale, long-term infrastructure projects.
Tung also suggested building an effective yield curve to attract long-term patient capital and meet the needs of long-horizon investors, particularly insurers and pension funds with projects that require stable finance, in which the government plays a pivotal role in considering long-term bond issuances. He added that heightening the credit rating and current yield can address the patient capital's illiquidity, increasing the attractiveness to long-horizon investors.
Gloria Leung
