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Hong Kong financial markets, 2022 review and 2023 outlook
2022 will soon become history, and we will usher in a new year. Looking back on the past year, the conflict between Russia and Ukraine caused global prices to skyrocket, the Federal Reserve's consecutive sharp interest rate hikes triggered sharp fluctuations in global markets, and many countries around the world faced economic recession... Faced with a series of uncertain factors, as one of the most international financial centers, First, Hong Kong’s financial market is bound to experience significant fluctuations.
However, Hong Kong, which has emerged from the haze of the epidemic and has become increasingly stable, has continued to strengthen cooperation with the mainland and comprehensively promoted the internationalization of the renminbi by actively promoting the expansion of "interconnection" and other measures, playing the role of a 'super contact' between the mainland and the world. On the other hand, it actively promotes rule innovation and the development of financial technology and green finance, and strives to maintain its international leading position in multiple financial subdivisions. It can be said that flying through the chaotic clouds is still calm.
Looking forward to 2023, the Hong Kong financial market is worth looking forward to, both in terms of the expansion of the traditional market and the innovation of systems and products.
market performance
2022: Ranked fourth in the world in financing amount
2023: Overall performance will be better
In 2022, many global political and economic uncertainties will cause sharp fluctuations in global stock markets, and Hong Kong stocks are no exception.
In the past two years, the Hang Seng Index has been falling continuously, falling to 14597.31 points on October 31, 2022, a new low since the subprime mortgage crisis, and a drop of nearly 10,000 points from the opening at the beginning of the year. Subsequently, with the stimulation of various policies such as the relaxation of epidemic control and real estate liquidity support since November 2022, Hong Kong stocks started a major rebound to restore bottom valuations.
Looking forward to 2023, Zhu Jiang, director and director of the cross-border investment banking business line of Essence International Securities (Hong Kong) Co., Ltd., believes that the market generally expects that the Federal Reserve will stop raising interest rates or even cut interest rates after the second half of 2023. The recovery of overseas liquidity by then is also expected to boost Hong Kong stock valuations. further increase in value. At the same time, judging from the recent guidance of the Central Economic Work Conference, China will enter a new expansion cycle. The stock market, economy, and RMB exchange rate all have a high probability of strengthening in 2023. Against this backdrop, Hong Kong stocks are expected to deliver satisfactory results in 2023.
IPO
2022: Ranked fourth in the world in financing amount
2023: Overall performance will be better
The Hong Kong Stock Exchange recently stated that macroeconomic and geopolitical factors have reduced global initial public offering (IPO) market activity. However, the Hong Kong market still shows resilience compared with other foreign markets, and listing fund-raising activities showed a rebound trend in the second half of the year. As of November 30, a total of 69 new stocks were listed on the Hong Kong Stock Exchange, raising funds reaching 87.8 billion yuan. Among them, 42 new stocks were listed in the second half of the year, almost double the number in the first half of the year. This year, there were 51 new stocks from the new economy industry, accounting for 72.7% of the funds raised during the period.
According to the "Review of Mainland China and Hong Kong IPO Markets in 2022 and Prospects for 2023" report released by Deloitte China Capital Markets Services, the number of new shares and financing amount in Hong Kong hit a low in the past 10 years, with a total of 82 issuances expected in 2022 The new shares raised a total of HK$102 billion. Compared with 2021 (97 new stocks, financing of HK$331.4 billion), the number of new stocks fell by 15%, and the total financing decreased by 69%. However, the IPO financing amount of the Hong Kong Stock Exchange ranks fourth among global exchanges thanks to two very large new stocks of China Duty Free and Tianqi Lithium.
Looking forward to 2023, Deloitte predicts that there will be 110 new stocks in Hong Kong raising approximately HK$230 billion; it is also expected that more mainland companies will be listed in Hong Kong in the form of H shares, and many companies will become A+H listed companies. Regulatory reforms such as the launch of a RMB-denominated stock trading desk, the inclusion of overseas companies listed in Hong Kong into Southbound Trading and FINI will help support "dual currency, dual shares" and overseas companies and specialized technology companies to be listed in Hong Kong within this year, and Consolidate Hong Kong’s position as the world’s largest offshore RMB business center.
Au Zhenxing, managing partner of Deloitte China South China, said: "As these new and favorable developments take time to promote and stimulate economic and business activities, we expect the performance of the Hong Kong IPO market to slow down early next year, but the market momentum will then increase , we are convinced that the overall performance of Hong Kong's new stock market will be better in 2023, and will continue to highlight the role of the mainland's 'super connector' connecting the world or the world connecting the mainland."
Zhu Jiang suggested that Hong Kong should focus on improving market liquidity in the next year, including strengthening interconnection with domestic companies in the trading system to attract Beishui, launching new regulations for specialized technology listings (18C) as soon as possible, and updating and improving the listing system to attract domestic investors. foreign capital.
Derivatives
2022: Daily trading volume of RMB futures rises by 68%
2023: Develop into Asia Risk Management Center
Hong Kong has Asia's leading derivatives trading market and occupies an important position in the international financial market.
In 2022, the trading volume of derivatives products in Hong Kong still maintained strong growth, and the average daily trading volume of futures and many products in the derivatives market set new records. Data from the Hong Kong Stock Exchange shows that in the first eleven months of 2022, the average daily trading volume of futures and options increased by 9% compared with the same period last year, reaching more than 129,600 contracts. Among them, the average daily trading volume of the most popular RMB currency futures increased by 9% compared with the same period last year. During the same period, the price surged by 68%, reaching nearly 18,500 contracts.
In 2022, the diversity of derivatives products in Hong Kong will be further enriched. In August, MSCI China A50 Connectivity Index derivative warrants were listed on the Hong Kong Stock Exchange, further consolidating Hong Kong’s position as an offshore A-share risk management center; in November, the Hong Kong Stock Exchange launched Hang Seng Technology Index futures options, and added Index derivatives undergo multiple optimizations. According to data from the Hong Kong Securities and Futures Commission, as of September 30 this year, the number of unlisted structured investment products approved by the Commission increased by 60.3% year-on-year to 234.
In 2022, Hong Kong’s derivatives mechanism will also continue to expand. In July, the People's Bank of China, the Hong Kong Securities Regulatory Commission, and the Hong Kong Monetary Authority jointly announced that they would launch interconnection cooperation between Hong Kong and the mainland's interest rate swap markets ("Swap Connect"), allowing domestic and foreign investors to connect through infrastructure institutions in Hong Kong and the mainland. Connect and participate in the interest rate swap markets of the two places.
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