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HK to act as regional debt financing services centre

Hong Kong is well-placed to act as the regional centre for debt financing services for the region's huge infrastructure investment programmes, the Financial Secretary, Mr Donald Tsang, said today (Monday).

Speaking at the opening ceremony of the Asia Pacific Issuers and Investors Forum, Mr Tsang said Hong Kong's debt market was geared up to further expansion in the coming years.

"With its critical mass of financial institutions, excellent market infrastructure, advanced telecommunications, common law legal system and sound accounting and logistical support, Hong Kong can certainly play an important role in arranging such debt issues," he said.

The Asian Development Bank and the World Bank have both estimated that the region's infrastructural investment needs will amount to US$1.5 trillion to US$2.5 trillion in the years up to 2000 and that China alone will account for one-third of this

amount.

A substantial part is likely to be met by external borrowing through the international debt market.

"Hardly any other city is better placed than Hong Kong in arranging for China's debt issues," Mr Tsang said.

He said the development of Hong Kong's debt market had made a significant headway since early 1990s.

In terms of volume, the outstanding amount of Hong Kong dollar debt paper has experienced a phenomenal five-fold increase in the past five years to around HK$170 billion currently.

"Hong Kong now has a thriving debt market which has built up a critical mass for further development within a relatively short period of time," he said.

He said the outlook of the debt market was very positive. Besides substantial private sector projects, the ongoing funding requirements for infrastructure projects create a strong demand for debt financing.