Source: Hong Kong Government special administrative region – 4
Following is the speech by the Financial Secretary, Mr Paul Chan, at the 40th General Assembly of the Asian and Oceanian Stock Exchanges Federation (AOSEF) today (April 22):
Carlson (Chairman of the Hong Kong Exchanges and Clearing Limited (HKEX), Mr Carlson Tong), Bonnie (Chief Executive Officer of the HKEX, Ms Bonnie Chan), distinguished representatives of stock exchanges, honoured guests, ladies and gentlemen,
It is a pleasure to welcome you to Hong Kong. We gather today not merely as operators of individual markets, but as stewards of a shared ecosystem. Global capital has never been more mobile – or more selective. The question before us is this: How do Asia’s exchanges move from competing with one another to collaborating as a network, so that international capital sees our region not as fragmented markets, but as a compelling, coherent whole?
Together, the Federation’s 17 members represent roughly one-third of global market capitalisation and more than half of the world’s listed companies. Yet many international investors still treat Asia as an afterthought. Why? Because of too many global funds; navigating across our markets remains complex and unfamiliar when approaching us one by one.
The opportunity – and the challenge – are ours to address together. When an international asset manager can deploy capital into Korean semiconductors, Indian fintech, and Southeast Asian green infrastructure through a single, familiar infrastructure, we all benefit. When a long-term investor can gain exposure to Asian innovation without the hassle of navigating a maze of separate custodian accounts, the entire region wins. Our diversity is our strength, but only if we build the bridges that turn complexity into seamless accessibility.
Hong Kong’s role in this ecosystem is evolving. For decades, we have served as a gateway between international capital and the Chinese Mainland market. That role remains vital: more than half of our listed companies are Mainland enterprises, accounting for around 80 per cent of total market capitalisation. Our Connect schemes with the Mainland now account for roughly 70 per cent of international holdings of A-shares and about 60 per cent of offshore holdings of Mainland bonds.
But Hong Kong’s role is larger than any single corridor. We are increasingly a platform where the assets of one Asian market can be packaged and discovered by global investors who might otherwise never look at it. Last year, a Hong Kong fund manager worked with her Korean counterpart to list leveraged and inverse products in Hong Kong tracking Korean equities. These instruments have attracted a wave of international investors – many previously unfamiliar with the Korean market – effectively channelling fresh capital towards Korean stocks.
This is not a zero-sum transaction. For Korea, this means new global visibility. For investors, more tools to express their views. For Hong Kong, deeper markets. That is collective value creation – and a model we can replicate.
The lesson of our Connect schemes is clear: when two markets align on standards, clearing, and trading protocols, the multiplier effect far exceeds the sum of its parts. This playbook – built through managing cross-border order routing and settlement at scale – can be adapted to deepen linkages between any AOSEF members. Be it ETF (exchange-traded funds) cross-listings, co-developed indices, or mutual recognition of derivatives clearing.
This year, Hong Kong introduced our “Finance+” strategy. Its purpose is not to expand our market share alone, but to strengthen Hong Kong as capital-formation infrastructure for the entire region’s innovation economy. Our previous listing reforms have attracted pre-revenue biotech and specialist technology firms from across Asia to access global long-term capital. Our transition to a T+1 settlement cycle by late 2027 will reduce risk and improve capital efficiency – not only for Hong Kong, but for any regional partner with whom we share cross-listed products.
We are also broadening our product ecosystem. Hong Kong has become one of the world’s top three ETP (exchange-traded products) markets, with average daily turnover around US$5 billion. The expansion of thematic ETFs – spanning gold and commodities technology, cross-border indices, and digital assets – adds vibrancy and vitality to our market. Our ETF mutual recognition with Saudi Arabia’s Tadawul has created the largest such products in the Middle East. We are eager to pursue similar arrangements with more of you. Imagine an investor in one Asian market gaining exposure to another’s benchmark through a Hong Kong-listed product. These are not distant ambitions; they are the next logical steps.
Connectivity remains central. We have agreements with 20 exchanges worldwide to facilitate dual listings, and we will conclude more across the region. Our one-stop, multi-asset custodial platform, CMU OmniClear – a joint venture between the Hong Kong Monetary Authority and HKEX – will enable integrated management of equities and bonds, facilitating cross-asset collateralisation that supports the growth of derivatives markets across our network.
Ladies and gentlemen, these capital flows are not abstract. They fuel the real economy. Global institutional investors are actively seeking diversification and long-term growth. They are looking for Asia’s next generation of enterprises – green-energy innovators, digital banks, advanced manufacturers, etc. Hong Kong’s role is to ensure that when that capital arrives, it flows efficiently to where Asia’s best opportunities are – wherever they may be listed.
Our region’s demographic dividend, urbanisation, and expanding middle class will drive demand. Supply-chain and industry base reconfiguration is creating new industrial clusters. The 15th Five-Year Plan emphasises high-level opening up, encouraging more Chinese enterprises to go global while continuing to welcome international companies. The listing of CATL – the world’s then largest IPO (initial public offering) – illustrated this dynamism. But our vision is larger: we want to be the platform where Asian innovation meets global capital, and where global capital meets Asian growth, regardless of which AOSEF market that growth calls home.
So let me close with a proposal. Let us transform the AOSEF from an annual forum into a working group for tangible interoperability: mutual ETF listings, co-developed indices, shared disclosure standards, and eventually, multilateral connectivity that allows capital to move across our markets with greater ease.
We are not just marketplaces. We are the plumbing through which the region’s economic destiny flows. When we collaborate, we create incremental liquidity for each other. When we align our infrastructure, we lower the cost of global participation. When we pool access to international capital, we give every innovative enterprise in our region a better chance to scale and succeed.
And if I may borrow from our industry: in finance, as in plumbing, the best connections are the ones you do not have to think about – they simply work. Let us build those connections.
I wish you all a very fruitful General Assembly. Thank you.