The China Banking and Insurance Regulatory Commission provided reassurances again of Hong Kong’s financial hub status amid a wave of mainland corporates seeking a funding alternative to the increasingly restrictive U.S. market.
«At present, Hong Kong’s financial market is generally operating smoothly and the linked exchange rate system has a solid foundation, which also reflects the confidence of the international market in Hong Kong,» the CBIRC said in a statement.
«Hong Kong’s status as an international financial center will not be weakened and shaken, but it will become more prosperous and stable in the future.»
Two months ago, the CBIRC issued similar statements expressing confidence and hopes to consolidate Hong Kong as a global hub adding that it was «capable of responding to all kinds of risks and challenges».
China Opening
The statement also welcomed the entry of foreign players into the estimated $45 trillion financial service industry in the midst of a historic opening across futures, securities, and mutual fund businesses.
«It is expected that more foreign institutions will participate in China’s financial market in the coming period and become a viable force for the high-quality development of China’s financial industry,» the CBIRC said.
A handful of global financial giants have been rapidly seeking to capitalize on the new opportunities via accelerated expansion in the mainland. Most recently, regulators approved the establishment of a wealth management joint venture between Blackrock, Temasek and China Construction Bank.
IPO Pipeline
Another noteworthy trend for the Hong Kong market is the wave of mainland corporates seeking an alternative funding center to the U.S. as Washington increases pressure to tighten their bourses. Most recently, one U.S. official signaled the «likely outcome that enhanced listing standards lead to a wholesale de-listing of [Chinese] firms from U.S. exchanges by the end of next year».
Of the companies seeking a Hong Kong listing, the most notable is billionaire Jack Ma’s Ant Group which is reportedly seeking a dual listing in the city alongside Shanghai in the coming few weeks, according to a «Bloomberg» report citing unnamed sources.
The fintech giant is targeting a valuation of about $225 billion by raising $30 billion through the planned share sales – an accomplishment that would top Suadi Aramaic’s record debut globally at $29.4 billion in January this year.
