by Wang Jingzhong
HONG KONG, Dec. 17 (Chinese media) -- The current financial tsunami had sent share prices tumbling on global markets, but there had been little impact on Hong Kong market's operations, which had continued to "function smoothly and in an orderly manner," said Paul Chow, chief executive of the Hong Kong Exchanges and Clearing Limited (HKEx).
As one of the signatories to the open statement of the World Federation of Exchanges issued on Oct. 12, HKEx, among other global exchanges, affirmed its determination to remain open throughout this period of crisis, said Chow in a recent exclusive interview with Chinese media.
HKEx is also determined to fulfill its role as the operator of a continuous, transparent and open market for establishing and disseminating prices for exchange-traded instruments, he said.
"We believe a quality market will be the first to return when the economy recovers," he said.
MARKET SPECULATION ON HKEx
Some international financial institutions have downgraded their target prices on HKEx shares, such as Morgan Stanley which gave a target price on HKEx shares of 38 HK dollars (4.9 U.S. dollars).
"Hong Kong is a market of diversity and market participants have all the freedom to express their views. HKEx is not bothered by market forecasts," said Chow.
"Our market turnover has remarkably declined in the fourth quarter this year following the financial tsunami, but it is primarily due to the lower share prices," said Chow.
The average number of shares being transacted on a trading day had remained at a level similar to that of the first half of this year where there were more market activities, he said.
HKEx, as the exchange operator with a statutory duty to ensure an orderly, open, transparent, informed and fair market and to act in the public interest, "takes a long-term view and is focused on building not only a profitable company but also sustainable financial markets in Hong Kong," he said.
"It believes maintaining a quality and reliable marketplace is key to reinforcing investor confidence and achieving sustainable market development," he noted.
FUTURE DEVELOPMENT PLAN OF HKEx
Chow said that pursuant to its Strategic Plan for 2007-09, HKExis concentrating on its core competencies so it can advance as a leading international marketplace for securities and derivatives products focused not only on Hong Kong and the Mainland, but also the rest of Asia.
To be able to withstand changes and achieve long-term growth, HKEx will continue to seek improvements to the quality and foundation of Hong Kong's financial markets as it implements its strategic plan and positions itself to capture future business opportunities, he said.
"HKEx has a very active Issuer Marketing team," said Chow, noting that so far this year, they have visited a number of countries and regions, including Australia, Canada, Japan, Malaysia, South Korea, Russia, the United States and Vietnam, as well as the Chinese mainland and Taiwan.
"We hope these marketing efforts will further strengthen the international dimension of our market," he said.
As of November this year, Hong Kong stock market had 116 overseas companies coming from places other than the Mainland and Hong Kong. Among these companies, 50 are backed by Taiwan capital.
Mainland enterprises represented 70 percent of equity turnover value in November this year, 55 percent of the Stock Exchange's market capitalization and 36 percent of the companies listed on the HKEx market at the end of the month.
"Mainland enterprises are likely to remain a very important part of HKEx's business going forward," he said.
Regarding other possible cooperation and alliances, Chow said that HKEx will continue to monitor merger and acquisition developments in the exchanges industry.
"But at present, it appears to have little synergy in terms of revenue, cost, operations or technology with overseas exchanges," he said.
"HKEx has good prospects in its existing core businesses and should demand similar returns from new business or product ventures," he noted.
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