Hong Kong is set to launch a task force aimed at boosting liquidity in the stock market as part of its efforts to strengthen the city’s position as an international financial center. The task force will be led by Financial Secretary Paul Chan Mo-po and will propose short- and long-term measures to enhance the stock market’s performance. The announcement was made by Chief Executive John Lee Ka-chiu during a public consultation ahead of his policy address in October.
Lee emphasized the importance of the stock market to the government and expressed his desire for the task force to work quickly and provide recommendations to increase liquidity and competitiveness. He believes that strengthening the stock market will have a positive impact on Hong Kong’s economy as a whole.
When asked about the possibility of reducing the stamp duty on stocks, Lee stated that the task force will explore different options and consider various opinions during its research process. The aim is to create a highly liquid market that appeals to investors and attracts capital flows in the long run.
Gary Ng Cheuk-yan, senior economist for Asia-Pacific at Natixis Corporate and Investment Bank, highlighted that while Hong Kong’s market still enjoys decent liquidity, the stock turnover is currently lower than in 2020. Ng pointed out that the city’s main issue is weak investor sentiment, with other markets offering more attractive investment opportunities.
The task force’s proposals are expected to address these challenges and help Hong Kong regain its competitiveness. The market capitalization has taken a hit in recent months, dropping by approximately US$2.87 trillion compared to the levels recorded in February 2021. The Hang Seng Index has also declined by about 9% this year, following three consecutive years of annual losses.
In addition to the stock market initiatives, Chief Executive Lee also mentioned that his upcoming policy address will focus on measures to retain local talent and assist young people in planning their careers. By addressing these issues, the government aims to further strengthen Hong Kong’s position as a global financial hub.
The establishment of the task force reflects the government’s proactive approach to revitalizing the stock market and enhancing its competitiveness. By implementing short- and long-term measures, Hong Kong hopes to attract investors, expand the market size, and ultimately boost the overall economy. The task force’s recommendations will be eagerly anticipated and are expected to play a crucial role in shaping the city’s financial landscape.
