Ma extols virtues of HK's yuan business
Updated at 1.46pm: Secretary for Financial Services and the Treasury Frederick Ma Si-hang says Hong Kong is benefiting from being the first place outside the mainland to operate business in the yuan currency.
Mr Ma was addressing at the 90th Annual Conference of the Investment Industry Association of Canada in Vancouver overnight (HK time).
He discussed recent developments in financial markets in the mainland and Hong Kong - stressing the growing importance of yuan business.
'This greatly broadens the business opportunities for Hong Kong's financial services sector, and facilitates cross-boundary spending and economic integration between Hong Kong and the mainland,' the Financial Services Secretary said.
Mr Ma noted that as of April, 39 banks in Hong Kong were providing yuan deposit-taking, exchange and remittance services.
'The total renminbi deposits in Hong Kong have reached RMB22.7 billion [HK$22 billion] which is close to C$3.2 billion.'
Mr Ma said the launch of a yuan cheque-clearing mechanism earlier this year was also beneficial.
'Hong Kong residents can open renminbi current accounts and make payments by cheque for consumer spending in our neighbouring province, Guangdong,' he explained. 'We have been in discussion with the central government on other proposals to further expand the renminbi business, namely to allow cross-boundary trade to settle in renminbi and to establish a renminbi debt issuance mechanism in Hong Kong.'
Mr Ma said Hong Kong's bond market was becoming more attractive. (Bonds are debt instruments - securities sold by governments, companies and banks in order to raise capital. They normally carry a fixed-rate of interest known as the coupon. They have a fixed redemption value - the par value - and are repaid over a fixed period - the maturity).
Mr Ma said as well as the stock market, some mainland enterprises had also chosen to take advantage of the Hong Kong bond market.
'With our efforts to promote bond market development through enhancing financial infrastructure, offering tax incentives and simplifying the issuance process, our bond market has experienced impressive growth in recent years,' he said. Mr Ma said that since 1997, the amount of outstanding Hong Kong dollar-denominated debt securities issued by overseas borrowers had increased over seven times. 'We have also witnessed a remarkable increase in foreign participation in the bond market. As of May [this year], more than 20 mainland enterprises have issued and listed their bonds in Hong Kong, raising nearly C$9.7 billion [HK$67.3 billion].'
He revealed that more than 60 per cent of the funds were raised in the past 18 months.
'We are optimistic that this positive trend will continue and that we will see more mainland enterprises using Hong Kong's platform for issuing bonds.'
