Hong Kong kicks off a hectic November to reclaim city’s brand in capital markets and global business

Nearly 200 bankers and financiers are scheduled to attend the three-day Global Financial Leaders’ Summit from Nov 1 through 3
The Hong Kong Sevens rugby tournament and the Hong Kong Trade Development Council’s International Healthcare Week will take place after the bankers’ summit

Hong Kong financial summit 2022

Peggy Sito,Enoch Yiu,Pearl LiuandMia Castagnone

Published: 9:00pm, 31 Oct, 2022

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Hong Kong’s gradual return to normality will be on display when financial officials host the city’s biggest gathering of global banking heavyweights in three years.

Restrictions were eased for inbound travellers attending the Global Financial Leaders’ Investment Summit organised by the Hong Kong Monetary Authority (HKMA) from Tuesday through Thursday, allowing attendees to meet clients and staff in private venues even if they remain under medical observation upon arrival.

More importantly, the factors that buttress Hong Kong’s status as the world’s fourth-largest capital market remain intact: a common law legal system and a fully convertible currency within the second-largest economy on the planet.

Officials including the Chief Executive John Lee Ka-chiu, Financial Secretary Paul Chan Mo-po and the HKMA’s chief executive Eddie Yue Wai-man will also remind attendees of some of the policies that underscore Hong Kong unique strengths: its role as the ‘super connector’ between mainland China and the world, the city’s status as the trading hub for offshore yuan, a robust pipeline of initial public offerings (IPOs), a wider transborder Connect investment channel with the mainland, progress in fintech and sustainable finance.

Standard Chartered’s chief executive Bill Winters, during an interview at the Standard Chartered Building in Hong Kong’s Central district, on 30 October 2020. Photo: Xiaomei Chen.

The summit – extended by a day due to overwhelming response by attendees to speak – is one of the tentpole conferences during a busy November for Hong Kong, in a sure sign that the city is making a comeback after shutting itself from visitors in its pursuit to contain the Covid-19 pandemic.

The Hong Kong Sevens rugby tournament and the Hong Kong Trade Development Council’s International Healthcare Week will take place hot on the heels after the bankers’ summit.

“It will be one of the largest in-person congregations of financial leaders in the world since the start of the pandemic,” said Standard Chartered’s chief executive Bill Winters, one of the attendees of the summit, in a written response to South China Morning Post. “The exceptional line-up of speakers and participants at the summit reaffirms the status of Hong Kong as an international financial centre and her position as a gateway to the Greater Bay Area and China.”

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A raft of policies were unveiled this year to affirm Hong Kong’s role as China’s global financial centre. The city made up 60 per cent of the 1.54 trillion yuan (US$211 billion) of deposits in all offshore markets last year, far surpassing Taiwan, Singapore and the UK, said Credit Agricole’s head of Asia-Pacific credit Alan Roch.

The status was given a boost in July during the 25th anniversary of Hong Kong’s return to Chinese sovereignty, when the People’s Bank of China (PBOC) upgraded the city’s yuan settlement programme into a permanent arrangement and enlarged the allocation of the renminbi for the city to 800 billion yuan.

“Many connectivity programmes have been established to promote this role for Hong Kong,” Roch said, noting that the southbound channel of the Bond Connect allowed mainlanders to invest in Hong Kong-listed bonds. “This significantly enhanced the liquidity and depth of the dim sum bond market, and … sparked the growth of the offshore yuan deposit pool in Hong Kong.”

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Hong Kong is in a particularly advantageous position to serve as the hub for family offices and wealth management in southern China’s Greater Bay Area (GBA), which counts Hong Kong among its 11 urban centres, with a combined population of 86 million people.

“The dynamic in the Greater Bay Area obviously has an influence on our ability to grow …[and] is going to be an important part [of how we] serve those family offices,” said Julius Baer’s chief executive Philipp Rickenbacher, in an interview before the summit.

The GBA, which also includes Macau and the Guangdong provincial capital of Guangzhou, and China’s technopolis Shenzhen, has a combined economy estimated at US$1.7 trillion, which would make it similar in size to Brazil if it were a stand-alone economic entity.

Hong Kong has described itself as the “ super-connector” between China and the world under the Belt and Road Initiative (BRI), the GBA and the recently formed Regional Comprehensive Economic Partnership (RCEP) with China, Japan, South Korea, Australia, New Zealand and members of the Association of Southeast Asian Nations (Asean).

“[Hong Kong is uniquely imbued] with a common law legal system and listing requirements, a beneficial position with access to the GBA, strong financial expertise and a large talent pool,” said Andrew McCaffery, the chief investment officer of asset management at Fidelity, one of the world’s largest money managers, with US$4.5 trillion of assets under management. “All of these factors facilitate investment flows between Hong Kong and mainland China.”

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Topping it all is a robust IPO pipeline, where more than 140 companies have applied to raise capital through listing their shares in Hong Kong. The city was the world’s top IPO destination in seven of the past 13 years, ranking fourth in September with HK$69 billion (US$8.8 billion) of proceeds, according to Refinitiv’s data.

Hong Kong is the world’s second-largest market for biotech fundraising, with 53 listings through October, trailing only the Nasdaq market in New York.

“The global market sentiment also counts” as the dry spell in the IPO market hit every market from Hong Kong to New York and Europe for a variety of reasons, said John Lee Chen-kwok, vice-chairman and head of Greater China global banking at UBS. “The outlook for Hong Kong IPO markets will depend on the China macroeconomic development and its zero-Covid policy.”

The city is also making a big push into sustainable finance. As part of Hong Kong’s efforts to be carbon neutral by 2050, the government issued US$56 billion of green bonds last year to support projects with environmental benefits. The green finance push extended to retail investors, when the government’s inaugural sale of HK$20 billion of green bonds was snapped up.

“The Hong Kong government is a leading issuer in green bonds for the construction of green yield curve, and this can further develop Hong Kong as a green finance centre globally,” said Rhee Jung-ho, president and CEO of Mirae Asset Global Investments (HK).