ENG-2019 — Page 103

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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 2019, 1,241 Mainland enterprises were listed on the SEHK, raising $6.6 trillion from the Hong Kong market since 1993. Funds raised by Mainland companies represented 82 per cent of initial public offering (IPO) equity funds raised in 2019. Apart from Hong Kong and Mainland companies, 25 non-local companies from Germany, Macao, Malaysia, Singapore, South Africa, Thailand and the United States were newly listed on the SEHK in 2019. The SEHK is working to accept companies from more overseas jurisdictions to list in Hong Kong.

The SEHK has ranked first for seven out of the past 11 years since 2009 in terms of equity funds raised via IPOs. This included 2019, when IPOs raised over $310 billion. There were 183 new listings during the year, including 20 listing transfers from the Growth Enterprise Market (GEM) to the Main Board. In addition to new share issues, about $140 billion was raised on the secondary market, bringing the total equity funds raised to over $450 billion, fourth in the world and third in Asia. The securities market's total turnover amounted to $21.4 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, 25 per cent of the 658 SEHK trading participants and 53 per cent of the 195 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, for over-the- counter transactions, OTC Clearing Hong Kong Limited. These provide integrated clearing, settlement, depository and nominee services.

Exchange-traded products, which include exchange-traded funds (ETFs) and leveraged and inverse products, offer investors exposure to world, regional and Mainland indices and commodities. Leveraged and inverse products provide new trading and hedging tools, while ETFs with multiple trading counters in the HKD, USD and RMB increase flexibility in settlement and trading. During the year, 13 new ETFS were listed, bringing the total number of SEHK-listed ETFs to 111. Turnover of ETFs was $1.077 trillion.

Statistics on Securities Market (Main Board and GEM)

2017

2018

2019

Number of listed companies (year end)

2,118

2,315

2,449

Total market capitalisation (year end)

33,999

29,909

38,165

($ billion)

Total equity funds raised ($10 billion)

58

54

45

Total securities market turnover ($ billion)

21,709

26,423

21,440

Total number of shares traded (billion)

44,283

55,647

60,197

Number of derivatives warrants (DWs) listed (year end)

6,094

6,763

4,571

65