2022 has been an extremely busy and productive year for Hong Kong Exchanges and Clearing Limited (HKEX). A significant number of new projects and initiatives went live or were announced, contributing to Hong Kong’s ongoing competitiveness and attractiveness as an international financial centre. Against a challenging macro economic and geopolitical backdrop, Hong Kong’s financial markets continued to demonstrate their resiliency and robustness, with the second half of the year showing signs of encouraging momentum in the IPO market and a particular strong performance in the derivatives market.
In March, HKEX articulated its vision to build the Marketplace of the Future, underpinned by three strategic pillars: Connecting China and the World, Connecting Capital with Opportunities and Connecting Today with Tomorrow. And, throughout the year, HKEX has delivered against this strategy, part of a long-term transformative journey that will continue to support and further enhance the attractiveness of Hong Kong’s financial markets and the city’s global role as an East/West superconnector.
2022 has been a defining year for HKEX’s Connect franchise, launching and welcoming a number of new and significant initiatives that will continue to propel the Connect programme into the future. In July, HKEX went live with the inclusion for the first time of ETFs in Stock Connect, and also announced that Swap Connect would be introduced, offering mutual access between Hong Kong and Mainland China’s interbank interest rate swap markets. These were followed by official announcements in September that international companies were set to be included in Southbound Stock Connect for the first time; RMB counters would be added to Stock Connect; and that China Treasury bond futures would be made available in Hong Kong. These three initiatives are significant foundational pillars for the future growth of Hong Kong as an IFC and as a world-class international listing, risk-management and offshore RMB hub.
A series of new enhancements were also announced around the current Connect franchise, significantly enhancing access to the platform: in particular Stock Connect trading calendar enhancements were announced in August, adding new trading days every year to the programme.
The macro economic and geopolitical backdrop led to weak sentiment and softness in the global IPO market, but Hong Kong continued to perform well relative to others, with the listing market seeing renewed momentum in the second half of the year. During 2022, HKEX welcomed 69 new listings raising $87.8 billion as of 30 November, 42 of which took place in the second half, almost double that of the first half. 51 of the IPOs this year were from the new economy sector, accounting for 72.7 per cent of capital raised during the period. A further nine listings have taken place on HKEX so far in December, as of 20 December.
Seeking to further support the fundraising needs of innovative companies in the new economy sector, HKEX published a consultation paper on new listing rules for specialist technology companies in September. The proposed rules, if adopted, will provide a new channel for companies from five technology sectors to seek a listing in Hong Kong, further building on the existing vibrant and diverse new economy ecosystem that characterises Hong Kong’s capital markets.
Hong Kong is already home to the most extensive and vibrant offshore A-share derivatives ecosystem in the world, and HKEX continued to see robust volumes in 2022 in the MSCI China A 50 Connect Index Futures contracts, and recorded a new trading volume high in its US dollar/offshore RMB futures in November. In August, the first MSCI China A 50 Connect Index Derivative Warrants were listed, adding to the extensive portfolio of tools available to investors looking to manage their China exposure.
Throughout the year, HKEX’s derivatives market has gone from strength to strength, with investors accessing this increasingly vibrant market and capitalising on the broad range of investment and risk management opportunities that it presents. HKEX's suite of Options on Futures contracts – the Hang Seng Index Futures Options and Hang Seng China Enterprises Index Futures Options – have in November a combined open interest with a notional value in excess of US$52 billion. HKEX this year also launched its Hang Seng TECH Index Futures Options in November, alongside further enhancements to its existing Hang Seng TECH Index derivatives products, providing investors with ever more choices and flexibility.
Further boosting the competitiveness of Hong Kong’s market, HKEX introduced several operational enhancements, including Derivatives Holiday Trading in May, allowing investors to trade non-Hong Kong Dollar products during Hong Kong holidays when the markets of their underlying securities may be open. In December 2022, HKEX launched a new Hong Kong Dollar/ Renminbi Dual Counter Model alongside a Dual Counter Market Making Programme in its securities market, further supporting the listing, trading and settlement of RMB counters in the market and elevating the city’s role as the world’s premier offshore RMB hub.
HKEX welcomed 26 new ETPs to the Hong Kong market in 2022, bringing the total number of ETP offerings to 168 as of November 2022. Average daily turnover of ETPs reached $11.8 billion year-to-date, up 50 per cent from November 2021. 2022 has also been a strong year in digital asset investment options, with HKEX welcoming two of Asia’s first crypto asset ETFs in December.
HKEX has long been a vocal advocate for ESG governance, disclosure and investment opportunities, and in October, HKEX was proud to continue its journey in this regard with the launch of Core Climate, Hong Kong’s new international carbon marketplace, providing a platform for the effective and transparent trading of carbon credits and other green instruments. In under a month since launch, approximately 400,000 tonnes of carbon credits coming from China and around the world were traded on this new platform, placing Core Climate among the most active voluntary carbon marketplaces in Asia. The Hong Kong International Carbon Market Council, which was formed in July 2022 and has helped shape Core Climate, will continue to provide valuable insights and actively collaborate with HKEX on developing Hong Kong’s maturing carbon ecosystem.
STAGE, HKEX’s online ESG portal providing information, access and transparency on a wide range of sustainable, green and social investment products also had a good year with a total of 112 sustainability-focused products, such as bonds and ETFs, now displayed, up from 86 one year ago.
As a purpose-driven organisation with a unique role to play in connecting markets and the wider community, HKEX held its inaugural Impact Summit in December this year, bringing together corporate change-makers and social innovators to connect and share their insights on promoting corporate philanthropy, as well as fostering stronger bonds between businesses and society. This well-received event was a demonstration of HKEX’s continuing commitment – through the HKEX Foundation, the markets it operates and its regulatory function – to build a sustainable healthy community, in which all its stakeholders and constituents can thrive.
HKEX Chief Executive Officer Nicolas Aguzin said: “HKEX has made great progress this year on its journey to build the Marketplace of the Future. Whilst the macro backdrop has at times been challenging, we have launched or announced a significant number of important strategic and operational initiatives that will have both short and long-term positive implications for our markets. The expansion of our Connect franchise has been at a pace not seen since the launch of Stock Connect in 2014 – and these very encouraging developments will importantly further deepen our role as the superconnector between China and the world. Our proposals on new listing rules for specialist technology companies and the launch of Core Climate were also major milestone initiatives that will again further enhance the attractiveness and competitive of our markets, shaping the future of capital markets in the region and beyond for many years to come.”
He added: “On behalf of HKEX, I would like to thank our customers, business partners, regulators and our community in Hong Kong, Mainland China and around the world for their unwavering support over the last year. We are excited by what lies ahead and we think that 2023 will be a year of even greater possibility and connectivity.”
Here is a look back at some of the year’s highlights:
Corporate & Strategic Highlights
- HKEX Corporate Day in March outlined HKEX’s vision and strategy, setting out a roadmap to build the Marketplace of the Future
- Hong Kong International Carbon Market Council launched
- Core Climate, the first Hong Kong carbon trading platform launched
- Swap Connect, a new mutual access programme between Hong Kong and Mainland China’s interbank interest rate swap market, was announced
- Inaugural HKEX Impact Summit held
- 22nd Anniversary of HKEX as a listed company
- Re-opening of HKEX Connect Hall
- 8th anniversary of Shanghai-Hong Kong Stock Connect, the 6th anniversary of Shenzhen-Hong Kong Stock Connect and 5th anniversary of Bond Connect
- Signed new strategic cooperation with Shenzhen Stock Exchange
- HKEX made 12 new external Managing Director hires in 2022
Listing and IPOs
- Hong Kong maintained its position as one of the world’s most active IPO fundraising hubs, with $87.8 billion raised through IPOs this year1
- 51 new listings from the new economy sector this year, accounting for 72.7 per cent of capital raised in 20222
- Consultation paper on new listing rules for Specialist Technology Companies published
- Special Purpose Acquisition Company (SPAC) listing route went live; and the first SPAC listed in March
- Board Diversity and Inclusion in Focus Repository launched
- Enhancement to listing rules for overseas issuers came into effect in January
Products and services
- Inclusion of ETFs in Stock Connect, effective in July 2022
- IR Connect launched
- 26 new ETPs introduced, including the first green bond ETF and the first batch of Virtual Asset ETFs
- MSCI A 50 Connect Index Derivatives Warrants listed, Hong Kong’s first A-share structured products
- QME launched new soybean contracts
- LME announced introduction of a range of new sustainability certifications on LMEpassport
Market Operations
- Dual Counter Model and Market Making Programme announced in December
- Derivatives Holiday Trading commenced in May
- Stock Connect trading calendar enhancements announced, facilitating trading on all days where both the Hong Kong and Mainland markets are open
- Volatility Control Mechanism expanded to cover Exchange Traded Products
- Consultation Conclusions on Revising Position Limit and Large Open Position Reporting Requirements published
- Value-at Risk (VaR) platform in securities market launched
HKEX Foundation, Corporate Social Responsibility and ESG
- Signed Memorandum of Understanding with Guangzhou-based China Emissions Exchange to explore Greater Bay Area and international carbon opportunities
- HKEX Foundation launched 2022 Impact Funding Scheme, 2022 Charity Partnership Programme, University Scholarship Programme and new HKEX Research Funding Scheme
- HKEX Foundation has donated $100 million this year, supporting more than 30 projects and benefitting 60,000 people in need in our community. LME has made charitable donations of more than GBP120,000 in 2022
- First deadline for the LME’s responsible sourcing policy in June 2022, requiring that all LME-listed brands comply with global expectations for the responsible sourcing of metals
- HKEX Foundation committed a further $10 million donation in support of Hong Kong Covid-19 pandemic relief programme
- More than 1,000 hours spent volunteering in the community by members across the business in 2022
Awards and Accolades
- Best Derivatives Exchange of the Year from FOW
- Asia Pacific Derivatives Exchange of the Year from GlobalCapital
- Best Structured Products and Derivatives Exchange from SRP
- Best Annual Reports Awards from Hong Kong Management Association
- Best Corporate Governance and ESG Awards from Hong Kong Institute of Certified Public Accountants
- Further information on our awards is available on the HKEX Group website
Market Statistics for the period from 1 January to 30 November 2022 is now available.
Notes:
- As of 30 November 2022
- As of 30 November 2022
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metals Exchange.
As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.
HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
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