Factbox: Major finance milestones as Hong Kong marks 25 years since handover

A common view of Two Worldwide Finance Centre (IFC), HSBC headquarters and Financial institution of China in Hong Kong, China July 13, 2021. REUTERS/Tyrone Siu/File Photograph

HONG KONG, June 28 (Reuters) – Hong Kong returned to China in 1997 after 156 years of British colonial rule. Listed here are some main milestones for town’s monetary markets:

HONG KONG DOLLAR TRADING BAND

The Hong Kong greenback was pegged to the U.S. greenback on October 17, 1983, with a buying and selling band of between 7.75 and seven.85 per US greenback imposed since 2005. The Hong Kong Financial Authority (HKMA), town’s de-facto central financial institution, often enters the market to purchase or promote the foreign money to maintain it throughout the band.

DUAL HONG KONG AND MAINLAND LISTINGS

Industrial and Business Financial institution of China (601398.SS) grew to become the primary firm to execute an IPO concurrently in Shanghai and Hong Kong in 2006 when it issued A-shares and H-shares to boost US$21.9 billion, the biggest deal on the planet on the time.

STOCK, BOND AND WEALTH CONNECT

Shanghai-Hong Kong Inventory Join was created in 2014 to offer mutual entry between the fairness markets of Hong Kong and mainland China. Two years later, the programme was expanded to Hong Kong and Shenzhen Inventory Join, which allowed mainland buyers entry to smaller corporations in Hong Kong and worldwide buyers entry to new financial system corporations listed in Shenzhen. The join programmes now cowl about 2000 shares, in response to Hong Kong’s Securities and Futures Fee (SFC). In Might, China’s securities regulator agreed to incorporate exchange-traded funds (ETFs) in inventory join programmes with Hong Kong.

In 2017, Bond Join was launched to duplicate the fairness schemes and permit overseas buyers to speculate by way of Hong Kong in China’s multi-trillion bond market. The Northbound Bond Join has change into a significant channel for overseas buyers in search of entry to China’s bond market. In September final 12 months, China mentioned it will allow its buyers to commerce offshore debt with the opening of the “Southbound” leg of its Bond Join channel.

Wealth Administration Join launched in September 2021, linking China’s southern province of Guangdong with Hong Kong and Macau, to permit cross-border funds administration. The programme allows residents of Hong Kong and Macau to purchase mainland funding merchandise bought by banks within the Better Bay Space, whereas permitting residents of 9 Guangdong cities to purchase these bought by banks within the two offshore centres. learn extra

WEIGHTED VOTING RIGHTS

Hong Kong Inventory Change introduced in 2018 it will enable corporations with dual-class shares – or weighted voting rights – if they’re thought of to be “revolutionary”, in a transfer designed to facilitate listings from rising enterprise sectors. The choice was described by the legislation agency Skadden as probably the most vital change to Hong Kong’s itemizing guidelines in 20 years.

WAVE OF SECONDARY LISTINGS

The weighted voting rights adjustments in 2018 prompted a wave of secondary – or homecoming listings – which kicked off with Alibaba Group in November 2019. The Jack Ma-founded e-commerce large raised $12.9 billion within the deal that was the biggest share sale in Hong Kong on the time for 9 years. Since then, 18 corporations have raised $42.3 billion, in response to Refintiv information. The tempo of homecoming listings has remained robust as Chinese language corporations buying and selling in New York put together contingency plans as U.S authorities press forward with delisting corporations that do not meet regulators’ auditing necessities. learn extra

FUTURES

HKEX launched its MSCI A-share index futures product in 2021, an try to fulfill demand from buyers in Chinese language shares for hedging instruments at a time of surging volatility.

SPECIAL PURPOSE ACQUISITION CORPORATIONS (SPACs)

Hong Kong Inventory Change allowed Particular Objective Acquisition Firms (SPACs), recognized additionally as clean cheque corporations, to start out buying and selling from January 1, 2022, in keeping with most different main markets on the planet.

Nevertheless, tight restrictions on the kind of buyers which may purchase into the SPACs and banning retail participation dented demand for the merchandise together with the present bout of market volatility.

Solely two SPACs have listed for the reason that begin of the 12 months. learn extra

Reporting by Scott Murdoch; Modifying by Anne Marie Roantree and Gerry Doyle

Our Requirements: The Thomson Reuters Belief Ideas.