Hong Kong unveils plans to repair damage inflicted by protests on its image as a financial hub
- Measures include encouraging private equity funds and family wealth management offices to set up shop in the city
Hong Kong officials and regulators on Tuesday unveiled plans to promote the financial sector in an attempt to reboot confidence in the city as a fundraising centre and a springboard into the Greater Bay Area.
The city’s reputation as a global business and financial hub has taken a battering from three months of anti-government rallies that have frequently descended into violent clashes with riot police.
The government will introduce measures to encourage more international private equity funds to help Shenzhen-based technology start-ups raise funds in the city, according to Financial Secretary Paul Chan Mon-po.
Other measures will include trying to attract more family offices to set up in the city to manage their wealth, Chan said.
“Attracting private equity funds and family offices to come to Hong Kong will be the two future developments to allow the city’s financial sector to capture the opportunities arising from the development of the Greater Bay Area,” Chan told hundreds of brokers and bankers at the stock exchange’s Connect Hall on Tuesday.
Chan was speaking at a forum jointly hosted by the 10 financial services industry bodies to celebrate the 70th anniversary of the establishment of the People’s Republic of China.
It was the largest financial event held at the HKEX Connect Hall since the start of protests on June 9 that have gone on to rattle Hong Kong’s political, social and financial landscapes.
Fitch Ratings on Friday downgraded the city a notch from AA+ to AA and the outlook from stable to negative, saying the protests raised doubts about the city’s governance under the “one country, two systems” principle.
Speaking at the same event on Tuesday, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor reiterated her earlier objections to the Fitch credit downgrade.
“Even though Hong Kong faces overseas markets’ uncertainties and local social unrest over the past three months, the banking and financial markets work well and the exchange rate is stable,” she said.
“The rule of law and free flow of capital and talent have not been affected by the recent incidents. There is no reason to change the credit rating of Hong Kong.”
The anti-government protests – sparked by a now-withdrawn extradition bill – have rocked Hong Kong since early June, leading three companies to cancel their initial public offerings worth a combined US$11.05 billion, while other listing hopefuls have put their deals on ice.
Carrie Lam hits back at Fitch downgrade of Hong Kong’s credit rating
This has made it difficult for Hong Kong Exchanges and Clearing to reclaim its crown as the world’s largest IPO market worldwide this year, having slipped behind New York Stock Exchange and Nasdaq.
“The government has learned a lesson from the social events over the last two months. We will listen to different sectors to improve the economy and the society,” Chan said.
Chan, however, said Hong Kong would remain a fundraising hub for mainland companies while also helping them to go global.
“The Greater Bay Area is going to provide more opportunities to Hong Kong. There will be more cross-border connect schemes in future. After the stock connect and bond connect, we continue to look at insurance connect and wealth management connect in future,” he said.
Securities and Futures Commission chairman Tim Lui and HKEX chairwoman Laura Cha Shih May-lung also attended Tuesday’s ceremony.
