Hong Kong Exchanges and Clearing Limited (HKEX) claims that it had a solid 2024, marked by new leadership, greater connectivity and engagement with international markets, the launch of multi-year infrastructure enhancement programs, and fresh trading records that “underscore the market’s vibrancy and resilience.”
HKEX introduced a a number of new initiatives during the year 2024, enhancing the Group’s offerings and strengthening Hong Kong’s role as an international financial centre.
These included plans to open an office in Riyadh, as well as “adding Abu Dhabi and Dubai to the list of recognized stock exchanges, bolstering capital market connectivity between Asia and the Middle East.”
The Group saw the implementation of Severe Weather Trading arrangements, reflecting HKEX’s “commitment to continuously elevating its market competitiveness.”
HKEX Chair Carlson Tong and Chief Executive Officer Bonnie Y Chan assumed their “roles in April and March, respectively.”
This coincided with a period of improved macro conditions that fueled market enthusiasm, as highlighted by the new “daily trading records across all of HKEX’s markets in the third and fourth quarters, with the cash equities market hitting a record $620 billion in turnover on 8 October 2024.”
For 2024, Hong Kong ranked as one of the world’s top four IPO venues, with activity and “fundraising volumes rising sharply from a year earlier.”
As at 20 December, HKEX IPOs raised “a total of $83 billion from 66 new listings, including the city’s biggest IPO since 2021.”
HKEX’s new listing chapters supported evolving market “needs with two listings under the specialist technology Chapter 18C, three GEM listings following its reforms, and the first De-SPAC transaction.”
In October, HKEX announced an enhanced timeframe “for the new listing application process, together with the Securities and Futures Commission (SFC).”
This initiative, which features an accelerated processing timeframe for eligible companies listed in Mainland China, will provide “greater certainty and transparency for potential applicants and their advisers in formulating their listing plans.”
This announcement followed another Listing enhancement, with the implementation of a new treasury share regime in June that “provides issuers with greater flexibility in capital management through share buy-backs and resales of treasury shares.”
HKEX also issued a consultation paper in December on “optimizing the IPO price discovery process and open market requirements.”
In November, HKEX marked the 10th year of the Connect program, which has expanded beyond its initial “focus on equities to include bonds, Exchange Traded Funds (ETFs), and interest rate swaps.”
This year, more enhancements were implemented, “including the relaxation of ETF eligibility requirements under Stock Connect, as well as new trade types and services for Swap Connect.”
The upcoming inclusion of real estate investment trusts under Stock Connect — and the “introduction of RMB counters for Southbound trading — will further solidify Hong Kong’s role as a superconnector between Mainland China and global capital markets.”
HKEX’s derivatives market also had a very solid year, with “average daily volumes (ADV) of futures and options reaching 1.57 million contracts as at 30 November, up 16 per cent from a year earlier.”
Among new derivatives products launched during the period, HKEX introduced weekly Hang Seng TECH Index Options and weekly options for 10 single stocks, “enhancing its dynamic options ecosystem and catering to the growing demand for shorter-dated options.”
The Exchange Traded Products (ETPs) market, including ETFs and leveraged and inverse products, has gone “from strength to strength, with average daily turnover reaching $18.7 billion as at the end of November, an increase of around 34 per cent from a year earlier.”
During the year, HKEX welcomed Hong Kong’s “listings of Covered Call ETFs and Asia’s first Spot Virtual Asset ETFs, further enhancing product diversity and liquidity, contributing to the 36 new ETFs launched during the period.”
HKEX has also unveiled plans to digitize and automate the in-kind creation and redemption process for ETPs, “a move that will increase market efficiency and support the continued growth of secondary market activity for ETPs.”
To enhance the liquidity and vibrancy of Hong Kong’s markets, HKEX will proceed with a proposal to reduce minimum “spreads of eligible securities, following strong support after a market consultation, with the first phase set for implementation in mid-2025.”
Beyond products and microstructure enhancements, HKEX is developing capabilities that will “enable real-time trade processing and round-the-clock derivatives trading, ensuring that HKEX’s market infrastructure can meet the needs of the next generation of investors.”
HKEX had also announced plans to introduce new post trade services and features on its integrated cash market platform, the Orion Cash Platform (OCP), as well as plans to “develop the Orion Derivatives Platform (ODP), an in-house platform that will differentiate the Group’s derivatives offerings.”
In addition to this, HKEX will ensure its systems are technically ready for a T+1 stock settlement cycle by the end of 2025 and “facilitate discussion in 2025 on a suitable settlement cycle for Hong Kong’s markets, with plans to publish a white paper in the first half.”
The rollout of these platforms will help bolster HKEX’s ability to support global investors and solidify Hong Kong’s standing “as Asia’s premier risk management centre.”
HKEX Chief Executive Officer, Bonnie Y Chan, said:
“2024 has been a year of significant progress and delivery as we position HKEX and our markets for a sustainable and vibrant future. During the year, we have completed or announced various important strategic initiatives that will bring long-term positive impact to our markets, including reforms, new products, strategic partnerships, and programs to advance our future-ready capabilities. The improved macro backdrop also supported renewed vibrancy and robustness of our markets, positioning our listing franchise very positively into 2025 and beyond. But we can’t stop here. There is much ahead for us to pursue, and whilst I am very proud of the team’s achievements this year, I look forward to working together with my fantastic colleagues to delivering on our strategic imperatives, supporting our global investors and elevating Hong Kong’s financial landscape.”