Asian Financial Forum: HKEX’s Aguzin underscores Hong Kong’s ‘superconnector’ role, says China, rest of the world ‘massively underinvested’ in each other

Opportunities in China’s US$18 trillion economy remain significant despite a slowdown in 2023, bourse operator’s CEO says

Mainland investors buying and selling offshore debt through the Stock Connect mechanisms are starting to drive material volume: HSBC executive

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HKEX’s Nicolas Aguzin attends the listing ceremony of the CSOP Saudi Arabia exchange-traded fund in Hong Kong, in this file photo from November 2023. Photo: Edmond So

Published: 3:39pm, 25 Jan 2024Updated: 4:33pm, 25 Jan 2024

Hong Kong’s role as a “superconnector” between the capital markets of mainland China and the rest of the world will continue because of hugely untapped investment opportunities, Nicolas Aguzin, the CEO of bourse operator Hong Kong Exchanges and Clearing (HKEX), told the Asian Financial Forum (AFF) on Thursday.

“When we look at the total amount invested in China and Hong Kong relative to GDP [gross domestic product], the world is still massively underinvested in China,” Aguzin said. That is also the case the other way around, he added.

“China represents close to 20 per cent of the global GDP, and the amount of investment today by international investors is like 2 per cent, 3 per cent. So that, at some point, has to shift.”

While China’s economic growth has slowed, recording a 5.2 per cent increment last year, the opportunities in its US$18 trillion economy remain significant, Aguzin added.

Aguzin and the other speakers on the panel agreed that some investment flows were happening despite a difficult 2023, which saw high interest rates, heightened geopolitical tensions and an economic slowdown, around the world.

Southbound trading, or mainland investors buying and selling offshore debt through the Hong Kong exchange’s Stock Connect mechanisms, is starting to drive material volume, said Matthew Ginsburg, the global co-head of investment banking at HSBC.