Chan makes mark in first 100 bullish days as chief of HKEX
- As the Hong Kong stock market recovers from the gloom of the Covid-19 years, it looks forward to more IPOs, greater investment and fundraising
If fortunes can turn on riding a wave, the first 100 days of the new chief executive of Hong Kong Exchanges and Clearing (HKEX) is a case in point. Speaking days after that personal milestone, Bonnie Chan Yi-ting reflected on the market’s recovery from a Covid-related bear market on the back of positive sentiment on interest rates.
In her first 100 days the capital market reversed a decline in initial public offerings (IPOs), the Hang Seng Index rose more than 10 per cent, and average daily market turnover leapt 35 per cent. The city may soon reclaim its old rung near the top of the global IPO ladder.
To cap it all off, HKEX will no longer be compelled to suspend trading during typhoon shutdowns, unlike rival international exchanges.
If there is one wave or turning point behind the momentum of that comeback, especially in the flow of IPOs, it has to be in mid-April, when mainland regulators unveiled five measures to bolster fundraising in Hong Kong. Chan says the world’s fourth-largest capital market is now vetting more than 100 listing applications.
Given that market conditions are a function of interest rates, the comeback can be expected to take some time yet.
With Beijing’s supportive measures and an end, at least for the time being, to interest rate rises, the first female chief executive of HKEX has had better luck than predecessor Nicolas Aguzin, unfairly blamed by some for the stock market’s slump. His tenure coincided with the Covid-19 pandemic and a rising rates cycle, which saw the Hang Seng Index fall by nearly a fifth after the first rate rise.
Long may Chan and HKEX continue to ride the wave of recovery. To consolidate it, she has begun developing a platform for proprietary technology derivatives trading, and also sees green financial and carbon-credit trading platforms as key strategies.
That said, Chinese investment and fundraising remain paramount in her global vision for HKEX. About 80 per cent of shares traded daily here are in mainland-based firms, a link Chan describes as the “trump card”.
Chan’s first 100 days also were marked by progress in diversifying and enriching corporate governance through eliminating all-male boards of directors. Listed companies have until the end of the year to comply with the rule.
Since it was introduced, the number of Hong Kong-listed companies with all-male boards has fallen from 800 in 2022 to about 400. As Chan says, diversity – gender or any other – brings more ideas, more perspectives into boardroom discussions.
As an externally oriented economy with a pegged currency, Hong Kong’s fortunes may ebb and flow. The CEO cannot guarantee investors a charmed passage.
Her job is to ensure the proper functioning of the capital market, and to maintain confidence by putting in place rules to protect investors, and to deter wrongdoing.
