Editorial | Sluggish Hong Kong stock market cries out for task force with holistic approach
- Team set up by Hong Kong financial secretary will not only consider business and finance, but also geopolitics and US-China tensions
Financial Secretary Paul Chan Mo-po has set up a 13-member task force to undertake a comprehensive review of the local stock market. Rightly, it has been tasked to look beyond the narrow issue of enhancing liquidity, but to take a holistic and comprehensive examination in scrutinising a broad range of issues including stock-listing rules, market structure and trading practices.
This is a more farsighted mandate than merely, for example, reducing stamp duty by following the mainland’s example.
The government has been looking at ways to enhance the city’s capital market and its position as a premier financial hub. As the stock market has taken a downturn recently, this is as good a time as any to launch such a review.
The city must explore new investment fronts and opportunities to expand and survive.
A hostile regulatory and political environment in the United States offers a great opportunity for the city to expand its market for initial public offerings; more Chinese firms listed in the US are expected to “come home” for a second or even primary listing. But as important as the IPOs, they represent but one segment of the capital market.