Hong Kong's stock exchange will not rule out mergers and acquisitions to expand its business, Hong Kong Exchanges and Clearing (0388) chief executive Nicolas Aguzin said yesterday.

But the core strategy is new share listings as the bourse plans to further relax listing rules to attract large but loss-making high technology companies, Aguzin said during its Corporate Day yesterday.

He said the exchange has several projects to complete in the future and some may require acquisitions to accelerate growth and to acquire talent and skills that are not available now.

Head of listing Bonnie Chan also said that the exchange is reviewing the regime to ease listing rules for advanced technology firms.

HKEX has received more than 170 valid applications for initial public offerings recently despite the weaker investor sentiment in the market, she added.

In Financial Secretary Paul Chan Mo-po's budget speech last month, he said the Securities and Futures Commission and HKEX are reviewing the main board listing rules and examining ways to revise them to meet the fundraising needs of large-scale advanced technology enterprises.

Aguzin also acknowledged that the number of people leaving Hong Kong was affecting the financial market in the city.

"We're seeing limited inflows of talent and an increasing number of individuals leaving the city, which has resulted in a talent war in the financial industry," he said.

Meanwhile, chief financial officer Vanessa Lau Bik-yun said rising inflation and the brain drain will put pressure on its costs.

But HKEX will continue to balance between its long-term growth projects and its financial flexibility, Lau added.

On its subsidiary London Metal Exchange, Aguzin noted the LME board will see what lessons can be learnt from this month's chaotic nickel trading.

The LME suspended activity and canceled nickel trades earlier this month due to volatility that saw prices double to more than US$100,000 (HK$780,000) a tonne within hours. A spate of technical glitches after trading resumed left traders fuming.

HKEX will launch a digital asset-trading platform called Diamond this year, which will focus on assets related to environmental, social and governance investing in the initial phase.

The ESG products may include carbon credits and other green finance-related products, but will not consider trading cryptocurrencies in the initial rollout, said HKEX.

Aguzin says the brain drain is hurting the financial market in the city.

HKEX mulls M&As, to ease way for loss-making hi-tech