The HKEX CEO sees good times ahead for the stock market...จาก FXStreet

23 Jun 2020, 22:43 · Views 1,196

Mr. China's Hong Kong Call Is No Idle Boost

Exchange CEO Charles Li sees a big year for initial public offerings. The winds are in his favor.

When the chief executive officer of the stock exchange predicts good times ahead for the market, a measure of skepticism is usually merited. After all, it's part of the job to keep investor spirits up and give people a reason to trade. In the case of Charles Li, though, there's good reason to take him at his word.

This will be a big year for initial public offerings “no matter what,” the CEO of Hong Kong Exchanges & Clearing Ltd. told the Bloomberg Invest Global Summit on Monday. The underlying capital market is “very strong and very resilient” despite the challenges it faces, Li said.

His prediction should be viewed primarily through a political lens. The immediate context is China's handing down of the national security bill that it is imposing on Hong Kong. Beijing's determination to push through the law has fueled speculation that it will spur an investor exodus and undermine the city's status as an international financial center.

With the deed done, China now has a strong incentive to prove the doomsayers wrong. Money from mainland China has already poured into Hong Kong over recent weeks, bolstering the market during its most jittery moments. Beijing has plenty more levers it can pull.

Li said he was confident that it's only a matter of time before secondary-listed tech giants are included in the southbound Stock Connect that links the Hong Kong exchange to its counterparts in Shanghai and Shenzhen. This would allow a potential wall of money to enter the Hong Kong market to buy shares of companies such as Alibaba Group Holding Ltd., JD.com Inc. and NetEase Inc.

The Beijing-born HKEX CEO’s signature achievement in his decade running the exchange was setting up the stock and bond connect programs that established closer ties with the mainland market. He earned the nickname “Mr. China” for such endeavors. So his view of what Beijing is likely to do carries weight.

Reprinted from Bloomberg. All copyrights are reserved by the original author.

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