00:00Nearly $28 billion in terms of total proceeds this year.
00:03That's on track for one of the best years you've seen since 2021 for the city, Bonnie.
00:09300 sort of IPOs in the pipeline right now.
00:12So how many more than 300?
00:14We also have the confidential filing, which is not covered by that number yet.
00:18How are you dealing with the amount of paperwork, I'm guessing?
00:21Do you have enough manpower right now dealing with these applications?
00:24We do. In fact, I'm quite pleased and certainly I thank my team
00:28for keeping up that spirit and the momentum.
00:32We are increasingly trying to find ways to empower the team with technology.
00:39And in fact, we have been exploring, for example, the use of AI to help speed things up.
00:45But so far, I think the momentum has been great.
00:50And we are now at over 80 completed IPOs.
00:54And we're in the early, early November.
00:58So let's see what number we can wrap up the year with.
01:02That's a lot of gong ceremonies, obviously, this year, Bonnie, for you.
01:05But when it comes to, you know, once we get another wave of these IPOs,
01:10again, we're talking about 300 in the pipeline.
01:13Are you concerned that a big chunk of that money is going to be taken away from the equity market?
01:17Sorry.
01:18Are you concerned that the liquidity issue,
01:20that there's going to be a big chunk of money that's going to be taken away from the equity market?
01:23Not at all.
01:24In fact, what is really pleasing this year, it's a return of international investors.
01:32So if I look at the IPOs which have been done to date, many deals we are seeing over half.
01:38And in fact, some deals are even close to the 70, 80 percent mark,
01:42representing international investors returning to the Hong Kong IPO market in earnest.
01:48So, you know, I'm personally very confident that so long as we are able to present investors around the world
01:56with the right opportunities, the money will come.
01:59Yeah.
01:59I mean, I just came back from South Korea.
02:00You just came back from Saudi.
02:01So certainly we have a lot of takeaways on both these trips.
02:03But the fact that the U.S. and China have reached a truce for one year, what does that mean for Hong Kong in terms of the outlook now?
02:11Well, I think if you dial the clock back three weeks ago, people were actually worried that maybe the leaders are not going to meet at all,
02:20which obviously turned out to be not the case.
02:24And I guess, you know, what I focus on at HK2 to make sure that regardless of market conditions and, you know,
02:33these trade talks and, you know, the geopolitical situation, we provide the investors around the world with a resilient market,
02:41an orderly market that they can trade in and out.
02:43I think, you know, with the talks continuing, you know, I mean, it's a truce for now, like you said, things will pick up again.
02:51Hopefully we continue to have that, you know, very trusted market so that regardless of how investors want to take that decision, they can trade.
03:01I think the height of things were quite tense.
03:04There was this threat of Chinese companies being delisted in the U.S.
03:08And maybe people were hoping that Hong Kong would be that place that they could seek some refuge in the like.
03:14There was a bit of pressure earlier on this year about easing these so-called dual class shares and that the need to kind of prioritize that.
03:21Is there less of a need and urgency now, given that we're in a truce?
03:25Well, I think the way you put it, the focus seems to be on the push factor, right?
03:29Because, you know, companies are worried about delisting risk.
03:33I tend to focus on the pull factors, you know, the attraction that Hong Kong is capable of providing, which is, first of all, right, the access to global capital.
03:43But more importantly, and that's our secret weapon, as you know, is the Connect franchise, whereby companies listed on our exchange is capable to tap the very strong self-bound flow of capital from the Chinese mainland.
03:56And that sets us apart from other exchanges.
04:00So I think, you know, and you have seen, obviously, the self-bound volume since the beginning of the year has stayed very, very strong.
04:08And so I would say that, you know, regardless of the geopolitical situation and whether or not these threats are real or not, I do trust that, you know, the Hong Kong is able to present a set of pull factors whereby companies will really see the merit of getting a listing on the Hong Kong market.
04:28Are companies willing to alter their company structures just to fit the city's limits, though?
04:32I mean, are you seeing that?
04:33Well, I guess, you know, for that particular issue, companies will have to think about their own needs.
04:41And frankly, for corporate governance matters, shareholders have a say, right, whether or not they're willing to accept a particular kind of company structure or whether they would like to see, you know, more, you know, a company where, you know, shareholders have a more equitable say.
05:00I think it is for the investors and the companies involved to decide for themselves.
05:05Now, on our part, we have introduced weighted voting rights since 2018, which is now seven years ago.
05:14I guess, you know, through our interaction with a lot of market participants, we do believe that maybe that's something that we can revisit and see how, you know, we can continue to improve our listing regime, just like how we have done in other areas.
05:28Okay. So there are conversations now in terms of possibly reviewing this or early stages right now?
05:33Well, we, I think, over the past when we engaged the market on various topics, this is one area where they have, you know, mentioned that, you know, they would like to see perhaps some revisiting.
05:46Right. There's also the latest rules in IPO allotment mechanism, which some have said it makes it only almost impossible for retail investors to get a share of these IPOs.
05:56And really, the driving sort of supply kicks these IPOs quite high as well.
06:00And I think the SFC has talked about, we need to address this.
06:03How are you looking at this sort of issue?
06:05Well, the purpose of that exercise or, you know, the revision to that rule was really to come up with what we believe a better price discovery mechanism.
06:15Now, we know that in an IPO, in the context of an IPO, retail investors are mostly price takers.
06:23And we really wanted to give the issuers, listing their company, as well as institutional investors, a stronger bargaining power.
06:34So that, you know, through that bargaining, hopefully we will come up with a better price, which will be, you know, longer term sustainable.
06:43Now, obviously, very difficult to draw sort of a causal relationship between the two.
06:48But I would say since the introduction of the new allocation rules, the aftermarket performance of the IPOs have actually fared quite well.
06:56So we will continue to monitor.
06:58But I would say that, at least for now, what we set out to do, we believe we have achieved.
07:04Okay.
07:04Of course, as the inaugural woman chief executive, we can't leave without asking you a question about diversity.
07:09And this sort of survey that came out, where 45% of top financial sector roles go to women here in the city.
07:16That's quite a milestone in itself.
07:18What do you think is still needed to do?
07:20What's your next sort of aim when it comes to diversity?
07:23Yeah, I think, you know, as a member of the WCA, we are, I'm extremely pleased to see the results of the report.
07:31It is a very good set of data.
07:34And I think in Hong Kong, you know, there is still a lot to do.
07:38As you know, HKEX is one of the first exchanges, global exchanges around the world to introduce a mandatory ban to single gender.
07:47That was two years ago.
07:48And so, you know, I'm very pleased at the beginning of the journey, we still have 800 out of 2,600 listed companies with a single gender board.
07:56Now, that's basically eradicated.
07:59What I think we still need to do more is to build the pipeline, the female directorship pipeline.
08:05Occasionally, I hear that, oh, you know, people, you mentioned that, you know, when they go out and try to, you know, fill board seats with women, they're not seeing that, you know, churn in sort of great momentum yet.
08:19But I'm confident as we continue to bring more directors, more female directors into listed company boards, the churn will begin.
08:27And I think that is another big step forward in terms of promoting gender diversity in Hong Kong.
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