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00:00Have you ever done an interview where you haven't gotten a pipeline question?
00:02I'm trying very hard to steer people away from asking that first inevitable question, but please.
00:10Yeah, now I'm caught.
00:14Well, the financial secretary earlier said, well, two things.
00:19One is 400 plus companies have filed.
00:24That's accurate.
00:25Accurate.
00:26Okay.
00:26And that this year will, of course, be better than last year.
00:33I assume that's also accurate.
00:36Accurate in what sense?
00:37Well, let's talk about the pipeline.
00:40And instead of just focusing on numbers, let's put things in context.
00:44So last year, I think by now it's a well-recited fact.
00:47We completed IPOs for 119 issuers and raising a total of 37.5 billion US dollars.
00:58So we are now in early June.
01:01We have already completed 66 IPOs and the fundraise through IPOs to date is approximately 21 billion.
01:13So I think we are on good track.
01:15But like I said, let's focus not just on the numbers.
01:19I think what is very interesting to me with this pipeline, it's the composition.
01:25Okay.
01:26And let me call out maybe a few themes.
01:28So broadly speaking, I see four emerging themes.
01:33First of all, it's definitely tech.
01:35Okay.
01:35It remains, I would say, a very good portion of the pipeline.
01:39But within even the tech space, it's quite diverse.
01:43So obviously we have our flagship chapter 18A, which is pre-revenue biotechnology company.
01:49That's still showing very strongly in the pipeline.
01:52We also have 18C, which is specialist technology, and that will cover AI.
01:57But I think even within the AI bucket, it's really the full value chain.
02:03So from chips to compute to large language models to applications to even, you know, if you extend it further
02:12out, people talk about, you know, energy, right?
02:16Which is very, very important.
02:17That's a bottleneck, too.
02:18Yeah.
02:19And so, you know, you really see a proliferation of all these issuers and all the different segments within the
02:27AI bucket broadly.
02:28That's theme number one.
02:30Theme number two, I'm seeing a return of mineral companies in my pipeline.
02:37And that's very interesting.
02:38I think it's, broadly speaking, the mineral space is getting back into the right cycle.
02:45I think that has a lot to do with just how investors are diversifying.
02:49We saw the movements in metal prices last year, for example, right, from gold to silver to copper to anything
02:56which, you know, goes into EV batteries, for example.
03:00Right. Real-world assets.
03:01Yeah.
03:01So I'm seeing a pretty strong return of mining companies in the pipeline.
03:07The third one is A&H.
03:10That continues to be a trend.
03:13And I'm talking about companies which are listed on the Chinese Mainland Exchange coming to Hong Kong for another listing.
03:21And a lot of these issuers are really doing that because they want an offshore fundraising platform to support their
03:29internationalization journey.
03:32And I think that is now a, you know, tried and tested route, which has become very popular.
03:40The fourth theme is something I really like to share.
03:45So people always say, hey, Bonnie, your exchange is too concentrated on Chinese businesses.
03:53So, well, I know that, you know, we have historically been a very popular platform for Chinese-based companies to
04:03list.
04:03But when I did a double click on, you know, the 120 companies which listed on my exchange last year,
04:13what I found is very interesting.
04:15About half of them actually have revenue, more than half of their revenue generated from outside of China.
04:23So they are, in fact, already very international.
04:26I call them China MNCs these days.
04:29I also now begin to meet a lot of companies which are what I call born global.
04:37So on the face, you will call them Chinese company.
04:40But if you really look into it, it's very international.
04:44And that's a new breed coming out, which I'm very excited about.
04:47Talk to us about that.
04:48That's a good paradigm shift looking at, you know, the going abroad theme, going global theme of Chinese companies, China
04:56multinationals.
04:58You know, you buy the S&P 500, you're not just buying U.S. companies, right?
05:01These are companies that do business around the world.
05:04How much more momentum do you see?
05:06And is that in the A&H segment that you see that?
05:11Not just?
05:12Not just.
05:12But how much momentum do you see that as a pillar this year?
05:15I think it's going to continue on a growing track.
05:21It's inevitable in a way, right?
05:23So let me maybe, okay, everyone talks about the SpaceX IPO.
05:27Right.
05:28I didn't bring it up, but okay.
05:29Yeah, I'll bring it up.
05:31So it's obviously a very exciting and interesting deal.
05:35But, you know, a lot of people are also now looking into, you know, the supply chain behind SpaceX.
05:41Sure.
05:41And if you really peel the onion and look into it, I will be, you know, I'm quite sure that
05:47you will start seeing a lot of companies which may, you know, be, you know, what you generally looked at
05:54as Chinese companies.
05:55So what I'm trying to say is actually the global economy is still very interwoven and the Chinese supply chain,
06:05you know, really have a very broad coverage.
06:08And therefore, you know, to your question, it's not confined to an A&H company.
06:16Like I said, you now will be able to pick up a lot of born global companies, which from the
06:21day they are established, you know, is already quite global.
06:27So safe to say we'll top last year's number, whether that's volume or actual money raised?
06:32Is that safe to, safe to assume, direction of travel wise?
06:36Yeah, well, let me say this.
06:39Usually, usually the second half is always sort of more active than the first half of the year.
06:45So I gave the number for the first half already.
06:48Yeah, let's, I keep my fingers crossed.
06:51The, it doesn't seem like momentum has changed from last year.
06:54But on the surface, we showed you some headlines earlier.
06:58There have been some changes, whether or not it's this focus from quantity to quality.
07:02In what ways have things changed?
07:06Okay.
07:07A lot of ways.
07:08But one thing that I find very gratifying is when I go abroad and I just got back from Central
07:15Asia,
07:16I found that my engagement with both issuers and I think more importantly with investors, a lot more interesting.
07:25I feel that global investors have now really turned their focus back to this part of the world.
07:34And, you know, two years ago, I probably will still be trying my very best to debate whether or persuade
07:43global investors about the investability of China.
07:46Now, I think the assumption is it's very investable, but how should we do it?
07:51And when should we do it?
07:52So I found that the conversation to be a lot more informed, more interesting.
07:58That to me is a very big and positive change.
08:01How do we need to interpret the recent news of tighter oversight into cross-border investments?
08:10Okay.
08:11So you're probably referring to the announcement made end of May, 22nd.
08:18Now, we took note of that.
08:20And basically, it's targeting illegal cross-border investment.
08:26But the announcement also made a point to emphasize that the legal official channels are fine, right?
08:34Such as the stock net, which obviously have been in place since 2014.
08:40And so, you know, to me, Hong Kong as a market, obviously, we want good, strong activity,
08:47but we also want to put an emphasis on compliant behavior and activities, right?
08:52So to me, I, you know, I feel that, you know, it will probably, it's always good to tackle non
09:03-compliant behavior.
09:05But the fact that, you know, we can offer investors with a compliant and very efficient channel for them to
09:13do these cross-border investment,
09:15I think, is probably going to position us very well.
09:18Okay, so no issue that you foresee in the liquidity front being able to...
09:22Well, let me give you the numbers.
09:23I always like to speak with facts.
09:25So since the end of May, if you look at volumes, let's focus on, you know, southbound, northbound.
09:34I mean, everything has stayed pretty much, you know, the same.
09:39In fact, May has been a particularly strong month for us.
09:44Last year, for example, southbound ADT for the year is at HK$121 billion.
09:52It's improved about, you know, 14% year-to-date.
09:56Northbound has been very, very strong.
09:58So northbound last year was about 212 billion RMB.
10:04This is ADT.
10:06And now it's edging closer to 380 on some occasional days, touching 400, right?
10:13And what that is telling me is, while I know, right, a lot of people is under the impression that,
10:19oh, the Hong Kong market has done well because you have all these southbound flow.
10:24So, yes, factually correct, but I put more attention on the fact that the rest of the world
10:30seems to be more interested to trade in Hong Kong, first of all, but also through Hong Kong into the
10:35Asia.
10:36Into China, the northbound.
10:37Yeah.
10:37Let's talk about the product you guys got into are getting into the index business.
10:41Yes.
10:42Okay.
10:42So what does that mean and how are you doing it?
10:44And how does that show up in our world?
10:46Okay.
10:46So, yes, we launched our HKEX Tech 100 Index in December last year.
10:53And why are we doing it?
10:55First of all, I think, you know, we always want to venture into what we call adjacent business,
11:00which plays to the advantage of our strong core businesses.
11:04And we know investors, a lot of them needs benchmarks, you know, to track.
11:10But there's so many benchmarks already.
11:11Yeah.
11:12Okay.
11:12So why do we start with Tech 100, right?
11:15If we look at what is available today, we saw sort of a space, a white space that should
11:23be filled, which is an index which tracks a broader universe of technology companies.
11:32And by the way, tech companies, the definition has expanded quite significantly over the years.
11:37And so our Tech 100 actually also covers 18A and C, which other indices to date might not
11:45have.
11:45And the idea is that, you know, we provide that and hopefully that will give or that will
11:51be more representative, you know, of what makes up our market closer to the investor demand.
11:59And that's obviously the first step.
12:01The next thing that we should expect is obviously products, which will be offered on the back
12:07of these indices.
12:08And we're not going to stop with one.
12:11In fact, we also have in the past few months launched co-branded indices with other regional
12:17exchanges.
12:18So with Bursa Malaysia, we had now a co-branded large cap index.
12:23And it's constructed in a way where 60% are Hong Kong listed shares underlying.
12:30And the other 40% is Malaysian listed companies.
12:35And we will continue to get, you know, stay close with the investors.
12:39And the idea is really to help them or to provide them with the tools so that they can
12:46in turn come up with products or trading strategies.
12:51You've been, you mentioned the, one of the things that people constantly talk about is
12:57your reliance on China.
12:58But you've been traveling.
12:59You mentioned you're in Central Asia.
13:00You talked about Malaysia.
13:02What is, what's the strategy there?
13:05Why are you going out to, and you know, you recently had a big conference here as well
13:10of I think ASEAN and OSEAN exchanges.
13:12So what's the thinking there and how does that improve the product?
13:15Well, I was listening to the previous speaker, Ueda-san.
13:20And I think he puts it very well.
13:22Asia, the Asian region is getting a lot more interesting.
13:26And in fact, you know, it accounts for 40% of the world's population or growth.
13:32Yeah.
13:33And there are so many opportunities that, you know, we as an international financial center
13:39should really position ourselves to capture.
13:41With Asia, I also feel that Hong Kong is now emerging as a very good capital raising platform
13:49for a lot of regional companies.
13:52Many companies are already listed in their home market, but they might have already outgrown
13:58their home market, right?
13:59So with the need to continuously raise funds, there is definitely demand for tapping a deeper
14:08market, which Hong Kong is.
14:10And therefore, to me, it's always going to be two pools of participants that I look at and I focus
14:18on.
14:18On the one hand, issuers.
14:21On the other hand, investors.
14:22Right.
14:22And it should apply not only in Hong Kong, in the Chinese mainland.
14:27It should be regional and global.
14:28Should we expect more Central Asian and Southeast Asian names to list on your platform?
14:36I mean, you can mention names if you want to, but.
14:39Well, there was already one Central Asia company, which came to list on our exchange last year.
14:46I do hope that there will be more.
14:49So watch the space.
14:50Okay.
14:51That's all we have time for.
14:53Thank you so much.
14:54Went through very, very quickly.
14:55Thank you guys so much.
14:56Bonnie Chandler.
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