Hong Kong's latest budget includes a range of measures to promote wealth management, family offices, new share listings and yuan-denominated business, which would strengthen the city's role as an international financial centre and yuan trading hub, industry players said.
"We are pressing ahead with high-quality development of Hong Kong's international financial market to create more new growth areas," Financial Secretary Paul Chan Mo-po said in his budget speech on Wednesday.
Chan also said bourse operator Hong Kong Exchanges and Clearing (HKEX) was working on setting up a "technology enterprises channel" to help specialist technology and biotechnology companies, especially those listed in mainland China, seek listings in Hong Kong.
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The government would also review regulations to promote the issuance of tokenised bonds, Chan said. The Hong Kong Monetary Authority is preparing to offer its third round of such bonds.
"Hong Kong is expected to become the world's largest cross‑boundary wealth-management centre by 2028," Chan said.
He said that as of the end of 2023, the city was home to about HK$31 trillion (US$4 trillion) in assets under management.
To promote further growth in the sector, the government this year would submit a legal change to expand tax incentives for family offices, while the Securities and Futures Commission (SFC) would review regulations to allow more fund products to launch in the city, Chan said.
These measures would help attract more family offices and investment funds to Hong Kong, said Karina Wong, Greater China divisional president of CPA Australia, an accounting industry body.
"We would like to see the tax incentives for the family offices expand to cover artwork, antiques and collectibles, as these alternative investments are popular with many family offices," she said.
InvestHK, the government department responsible for attracting foreign investment, has helped 160 new family offices set up in the city over the past two years. Family offices are entities that wealthy families use to invest their wealth, manage succession and handle charity activities.
To promote trading of yuan-denominated shares, the government next year plans to seek a legal change to allow investors to pay stock stamp duties in yuan, in addition to the Hong Kong dollar.
"This will encourage more investors to trade Hong Kong stocks in yuan and hence will promote the city as a yuan trading centre," said Wilson Chan Fung-cheung, associate director of the MBA programme at City University. The government should also promote more yuan usage in retail and other sectors, he added.
HKEX would add more overseas markets as recognised exchanges, allowing companies in those markets to launch secondary share listings in the city, Chan said in his address. The exchange would also encourage listings by more companies in Asean and the Middle East, he said.
HKEX welcomed the measures, as CEO Bonnie Chan Yiting said the budget measures underscored the government's "commitment to elevating the attractiveness of Hong Kong's capital markets" to both international and mainland companies and investors.
"Working closely together with the SFC and our partners, we will continue to enhance our market microstructure and listing franchise, and expand and diversify our product ecosystem," she said.
"The recognition of more overseas exchanges would further strengthen the competitive position of the Hong Kong stock exchange and encourage more international companies to consider Hong Kong listings," said John Lee Chen-kwok, vice-chairman and co-head of Asia coverage at UBS in Hong Kong.
The timing was good for new listings given the recent stock market rally, said Tom Chan Pak-lam, honorary president of the Institute of Securities Dealers, an industry body.
The Hang Seng Index has jumped 21 per cent this year, after rising 18 per cent in 2024. According to exchange data, daily turnover reached HK$300 billion in recent weeks - more than double 2024's average of HK$131.8 billion.
The financial secretary also said the SFC would start on reforms to make the market fully electronic by early next year, while HKEX in the middle of this year would upgrade its systems to prepare for shortening settlement times from two days to one day. The bourse operator will also study the launch of a new market for delisted companies.
"We welcome these measures to enhance market efficiency," said Chan of the Institute of Securities Dealers. "We cannot just focus on new listings."
