Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing Ltd.(HKEx), wrote a letter to Santa Claus yesterday (Dec. 20) on the company’s official website, claiming that they are now busy improving the Shanghai-Hong Kong Stock Connect while getting ready for the opening of Shenzhen-Hong Kong Stock Connect. Besides, HKEx will announce its next three-year strategic development plan in January, hoping that Santa Claus can help to implement the company’s plans.
Charles Li wrote that the Shanghai-Hong Kong Stock Connect experiences safe and stable operation in 2015. The A-share market in Mainland China suffers drastic changes in 2015. The first half saw the most bullish run in A shares since the global financial crisis and the second half witnessed one of the most dramatic market routs in recent years. The good news is the Hong Kong market withstood the volatility, proving again that it is a mature, reliable, and sophisticated market.
2015 is also the first full year for the London Metal Exchange (LME) has operated as a truly commercial exchange, and also the first anniversary of the launch of LME Clear, a brand new clearing house HKEx built in Europe. LME and LME Clear are now important contributors to the financial performance of HKEx this year.
Charles Li said that HKEx has launched 34 new stock futures contracts and the second batch of LME mini contracts not long ago, and that is only the beginning of HKEx’s plan to build a critical mass of new products primarily in derivatives across different asset classes. The trading volume of these new products will not be big at the very beginning, but the products to be launched later will attract more market participants, particularly investors from the Mainland.
Charles Li also indicated that HKEx has completed the market consultation of Volatility Control Mechanism and Closing Auction Session which will be officially rolled out next year. These enhancements will strengthen the market structure and align HKEx with international market practices.
According to market statistics from Jan.1 to Dec. 15, 2015 released on Dec. 20, the turnover in HKEx’s securities and derivatives markets reached new single-year highs of HK$25.53 trillion and 183 million contracts, respectively. The previous records were registered as HK$21.67 trillion in 2007 and 142 million contracts in 2014, respectively. From Jan.1 to Dec. 15, 2015, the average daily turnover (ADT) of the securities market was HK$108 billion, while the previous record of ADT for Jan.1 to Dec. 31 is HK$88 billion registered in 2007. The market value of HKEx’s securities market exceeded HK$31 trillion for the first time in 2015. In addition, many products have had their highest single-year turnover ever, including Exchange Traded Funds (ETF), debt securities and a number of derivatives market products.
In the meantime, the IPO fundraising was US$31.8 billion from Jan.1 to Dec.15, 2015, the world’s highest for the period. There have been 125 newly-listed stocks and the total fundraising through IPOs and post-IPO during the same period was HK$1.06 trillion, exceeding the full-year record high established in 2014. The turnover of securitized derivatives including derivative warrants and Callable Bull/Bear Contracts under HKEx from January to November 2015 ranked first around the world for the ninth straight years.