Joseph ChanandJohn Siah

Opinion | How Macau’s rise as financial hub opens doors for Hong Kong

With its robust financial institutions and broad pool of investors, Hong Kong can play a vital role in incubating Macau’s financial market

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The sun sets on Sai Van Bridge in Macau on December 18. Although there is no stock exchange in Macau, the city has authorised two financial asset exchange platforms. Photo: Eugene Lee

Joseph ChanandJohn Siah

Published: 4:30pm, 7 Jan 2025

Macau has always presented itself as a bustling, world-class entertainment venue, with its thriving tourism and the gaming industry. In recent years, Macau has become a major offshore Chinese bond market, which is a milestone for the city’s efforts to broaden its economy and reduce reliance on gaming industry.

Like Hong Kong, Macau benefits from the “one country, two systems” model and enjoys similar economic support. In recent years, the city has moved to boost its appeal in the financial market. This adheres to Beijing’s wish to transform Macau into another offshore financial centre.

Macau’s new Financial System Act, passed in 2023, demonstrates the government’s commitment to strengthening its financial system and keeping pace with the evolving financial technology. In particular, the act includes a specific section on financial technology, introducing a legal framework to grant temporary licences for financial technology projects on an experimental basis.

Although there is no stock exchange in Macau, the city has authorised two financial asset exchange platforms. In August 2018, the Macau government approved the establishment of Chongwa (Macao) Financial Asset Exchange (MOX). This is a debt securities trading platform which mainly serves Chinese firms and Chinese local government financial vehicles.

In 2022, amid the Covid-19 pandemic, Macau approved the Micro Connect Macao Financial Assets Exchange (MCEX) as the city’s second financial asset exchange. This is the world’s first licensed global exchange for revenue shares.

MOX has made significant progress to become a regional hub for Chinese firms and local government financing vehicles (LGFV). The cheaper and simpler registration process for the issuance of debt securities attracts LGFVs and state-owned enterprises seeking smaller bond listings in Macau. Cooperation with other exchange platforms, such as with the Luxembourg Stock Exchange in 2021, increases outreach to international investors and enhances bond liquidity.