ENG-2018 — Page 99

4

Financial and Monetary Affairs

The Hong Kong market's liquidity and access to international investors are attractive to companies seeking to raise capital. At the end of 2018, 1,146 Mainland enterprises were listed on the SEHK, raising $6.3 trillion from the Hong Kong market since 1993. Funds raised by Mainland companies represented 95 per cent of initial public offering (IPO) equity funds raised in 2018. Apart from Hong Kong and Mainland companies, 28 non-local companies, from Australia, Canada, France, Macao, Malaysia, Singapore, Thailand and the United States, were also listed on the SEHK in 2018. The SEHK is working to accept companies from more overseas jurisdictions to list in Hong Kong.

The SEHK has ranked first for six out of the past 10 years since 2009 in terms of equity funds raised via IPOs. This included 2018, when IPOs raised over $280 billion. There were 218 new listings during the year, including 10 transfers of listing from the Growth Enterprise Market (GEM) to the Main Board. In addition to new share issues, more than $250 billion was raised on the secondary market, bringing the total equity funds raised to over $540 billion, fourth in the world and second in Asia. The securities market's total turnover rose 21.7 per cent to $26.4 trillion. At the HKEX, the turnover of securitised derivatives has ranked first in the world since 2007.

As an international and open market, Hong Kong attracts many intermediaries from other markets to set up companies locally and most international brokerages have branches in the city. At the year end, 27 per cent of the 647 SEHK trading participants and 55 per cent of the 194 HKFE trading participants were from the Mainland or overseas markets.

The HKEX operates four clearing houses: Hong Kong Securities Clearing Company Limited, HKFE Clearing Corporation Limited, SEHK Options Clearing House Limited and over-the-counter (OTC) Clearing Hong Kong Limited. These provide integrated clearing, settlement, depository and nominee services for its participants and members.

Exchange-traded funds (ETFs) offer investors a wide range of investment exposure to world, regional and Mainland indices and commodities. During the year, 15 new ETFs, including leveraged and inverse products, were authorised, bringing the total number of SEHK-listed ETFs to 137. Leveraged and inverse products provide investors with new trading and hedging tools, while ETFs with multiple trading counters in the HKD, USD and RMB increase flexibility in settlement and trading. Turnover of ETFs was about $1 trillion.

61