1 00:00:00,280 --> 00:00:03,560 Speaker 1: The Hong Kong Stock Exchange held the hk EX Connect 2 00:00:03,560 --> 00:00:06,280 Speaker 1: Summit Monday to mark the tenth anniversary of the city's 3 00:00:06,280 --> 00:00:09,959 Speaker 1: cross border stock link. For more on the celebration, Bloomberg 4 00:00:10,000 --> 00:00:13,520 Speaker 1: Steven Engel spoke with hk EX CEO Bondi. 5 00:00:13,400 --> 00:00:16,960 Speaker 2: Chin on a very momentous occasion, the tenth anniversary. Well, 6 00:00:17,040 --> 00:00:21,200 Speaker 2: yesterday was I believe of the stock connect program Shanghai 7 00:00:21,239 --> 00:00:24,640 Speaker 2: first and shen Jen a couple years later, obviously resounding 8 00:00:24,720 --> 00:00:28,840 Speaker 2: success according to your assessment, surely, but there's room to grow. 9 00:00:28,960 --> 00:00:31,920 Speaker 2: How would you say from that tea house meeting between 10 00:00:32,000 --> 00:00:34,920 Speaker 2: Charles Lee of the hk EX and also I believe 11 00:00:34,960 --> 00:00:37,840 Speaker 2: the Shanghai Boyds chairman back in twenty twelve, that would 12 00:00:37,880 --> 00:00:38,800 Speaker 2: grow to this size. 13 00:00:38,920 --> 00:00:42,040 Speaker 3: Yeah, thank you, Steve. And it's certainly a very momentous moment. 14 00:00:43,479 --> 00:00:46,400 Speaker 3: Ten ten years of the connect story. I think we're 15 00:00:46,440 --> 00:00:49,440 Speaker 3: still actually at the beginning. If you look at the 16 00:00:49,520 --> 00:00:53,720 Speaker 3: volume so far from the very beginning, southbound traffic has 17 00:00:53,960 --> 00:00:57,640 Speaker 3: actually grown fifty times, and no found traffic has also 18 00:00:57,640 --> 00:01:01,600 Speaker 3: grown twenty five times. And this is quite amazing. And 19 00:01:01,880 --> 00:01:03,800 Speaker 3: if you ask me how we're going to continue to 20 00:01:03,840 --> 00:01:06,120 Speaker 3: expend it, I'll say three ways that we're going to 21 00:01:06,160 --> 00:01:08,640 Speaker 3: do it. First of all, products, we need to put 22 00:01:08,959 --> 00:01:11,520 Speaker 3: a more products onto the shelf. As you know, we 23 00:01:11,600 --> 00:01:14,040 Speaker 3: started with stock and then we expanded it to include 24 00:01:14,120 --> 00:01:16,920 Speaker 3: bonds ETFs. We're going to soon have reads. 25 00:01:17,640 --> 00:01:20,600 Speaker 2: But there is Can I jump in and say there's 26 00:01:20,600 --> 00:01:21,200 Speaker 2: no date. 27 00:01:21,080 --> 00:01:23,920 Speaker 3: Yet, Well, we're working on the details. I mean, certainly 28 00:01:23,959 --> 00:01:26,480 Speaker 3: with every enhancement, we need to make sure that you know, 29 00:01:26,680 --> 00:01:30,160 Speaker 3: all the screws are tieden up, uh and there is 30 00:01:30,200 --> 00:01:32,319 Speaker 3: still a lot of a lot of white space that 31 00:01:32,360 --> 00:01:35,640 Speaker 3: we can fill in. So that's the first dimension. Secondly, 32 00:01:35,640 --> 00:01:38,480 Speaker 3: the micro infrastructure, which is very important. We need to 33 00:01:38,520 --> 00:01:41,200 Speaker 3: make sure that the users of the Connect franchise have 34 00:01:41,240 --> 00:01:44,320 Speaker 3: a good experience. And I think you know, very recently 35 00:01:44,360 --> 00:01:50,040 Speaker 3: we've proven that with micro infrastructure changes, the market can 36 00:01:50,080 --> 00:01:53,760 Speaker 3: be greatly enhanced severe weather trading as an example. I 37 00:01:53,840 --> 00:01:56,360 Speaker 3: think we've proven to the world that you know, Hong 38 00:01:56,480 --> 00:01:59,520 Speaker 3: Kong as a market has stepped up to that moment. 39 00:01:59,840 --> 00:02:02,200 Speaker 3: And then third, but not you know, the last it's 40 00:02:02,280 --> 00:02:05,800 Speaker 3: the fact that at the moment, you know, the participants, 41 00:02:06,080 --> 00:02:09,960 Speaker 3: I think it's still a relatively small pole. I've been 42 00:02:10,000 --> 00:02:12,880 Speaker 3: traveling a lot recently and I would say that you know, 43 00:02:12,919 --> 00:02:16,040 Speaker 3: the Connect story is still pretty novel to a lot 44 00:02:16,080 --> 00:02:18,399 Speaker 3: of our friends in the world, and so I'm going 45 00:02:18,400 --> 00:02:21,040 Speaker 3: to go out there and continue to market the Connect story. 46 00:02:21,160 --> 00:02:23,679 Speaker 2: You've traveled a lot. You've been obviously to Riad, You've 47 00:02:23,680 --> 00:02:26,080 Speaker 2: been back and forth to Shanghai and Beijing. You just 48 00:02:26,120 --> 00:02:28,880 Speaker 2: came back from Lima. Apeg that's right. What was the 49 00:02:28,960 --> 00:02:31,000 Speaker 2: key takeaway there? Before we get into these steps, we 50 00:02:31,040 --> 00:02:34,160 Speaker 2: need to talk about primary connect and the other things 51 00:02:34,160 --> 00:02:36,160 Speaker 2: that have been promised but have not delivered. But what 52 00:02:36,200 --> 00:02:38,720 Speaker 2: did you what was your key takeaway quickly on Apec? 53 00:02:38,960 --> 00:02:42,359 Speaker 3: Okay, so my first takeaway from APEC is that I'm 54 00:02:42,440 --> 00:02:45,320 Speaker 3: very happy to see that countries are still very willing 55 00:02:45,480 --> 00:02:48,560 Speaker 3: and keen to make friends with one another. So, you know, 56 00:02:48,600 --> 00:02:51,080 Speaker 3: while I hear a lot about you know, geopolitics and 57 00:02:51,120 --> 00:02:53,400 Speaker 3: all that and how it's going to jump down markets, 58 00:02:53,680 --> 00:02:55,800 Speaker 3: what I saw on Lima is quite the contrary. So 59 00:02:55,919 --> 00:02:59,040 Speaker 3: that is a big encouragement. And secondly, the reason why 60 00:02:59,040 --> 00:03:01,680 Speaker 3: I'm traveling so much is really to get you know, 61 00:03:01,880 --> 00:03:05,160 Speaker 3: the story of Hong Kong and connect out to the 62 00:03:05,200 --> 00:03:08,040 Speaker 3: rest of the world. You know, in this region, I 63 00:03:08,120 --> 00:03:10,680 Speaker 3: think a lot of people understand, you know, the impact 64 00:03:10,680 --> 00:03:13,720 Speaker 3: of Connect and what it brings in terms of enhancing 65 00:03:13,760 --> 00:03:16,000 Speaker 3: the two way capital flows between China and the rest 66 00:03:16,040 --> 00:03:18,880 Speaker 3: of the world. But a lot of you know, the 67 00:03:19,240 --> 00:03:22,919 Speaker 3: rest of the world, it's still you know, learning about it, 68 00:03:23,000 --> 00:03:25,840 Speaker 3: and so it's important for that kind of engagement. 69 00:03:25,880 --> 00:03:28,200 Speaker 2: Would you say the Connect program still though, has its 70 00:03:28,240 --> 00:03:30,480 Speaker 2: training wheels on. I mean there's a bit of shackles 71 00:03:30,520 --> 00:03:33,760 Speaker 2: and there's been promises to grow it. Primary Connect is 72 00:03:33,760 --> 00:03:36,840 Speaker 2: the big one, obviously. Charles Lee back in twenty seventeen 73 00:03:37,320 --> 00:03:39,960 Speaker 2: said this is the next big thing, right, This market's 74 00:03:40,000 --> 00:03:42,760 Speaker 2: been waiting for that. Chinese investors have been waiting for 75 00:03:42,800 --> 00:03:46,320 Speaker 2: this to get these primary listings into the stock Connect 76 00:03:46,640 --> 00:03:49,680 Speaker 2: some would say that it held back a Ramco from 77 00:03:49,720 --> 00:03:51,040 Speaker 2: even thinking about Hong Kong. 78 00:03:51,240 --> 00:03:54,160 Speaker 3: Well, it's very interesting you talk about, you know, how 79 00:03:54,320 --> 00:03:57,840 Speaker 3: everyone is waiting for it. I think that basically showed that, 80 00:03:57,920 --> 00:04:00,680 Speaker 3: you know, the Connect franchise has a lot of promise, 81 00:04:00,960 --> 00:04:04,920 Speaker 3: and in fact, I think the eagerness really stems from 82 00:04:04,920 --> 00:04:07,160 Speaker 3: the fact that a lot of investors around the world 83 00:04:07,480 --> 00:04:10,640 Speaker 3: want to take advantage of the growth of the China market, 84 00:04:11,040 --> 00:04:14,839 Speaker 3: both in terms of what corporates it's turning out right, 85 00:04:14,880 --> 00:04:18,680 Speaker 3: those are great investment opportunities as well as the investor 86 00:04:18,720 --> 00:04:22,320 Speaker 3: base that China as a country is capable of providing 87 00:04:22,360 --> 00:04:26,119 Speaker 3: the world. So my duty, my responsibility running the change 88 00:04:26,160 --> 00:04:28,640 Speaker 3: is really to continue to build it with those three 89 00:04:28,680 --> 00:04:29,880 Speaker 3: dimensions I just mentioned. 90 00:04:29,920 --> 00:04:33,800 Speaker 2: Sure, so Northbound has been pretty fruitful for international exposure 91 00:04:33,839 --> 00:04:36,160 Speaker 2: into China. I think over the past decade foreign holdings 92 00:04:36,200 --> 00:04:38,800 Speaker 2: of Chinese stocks have jumped more than twenty four But 93 00:04:38,839 --> 00:04:42,080 Speaker 2: this primary connect would allow mainland investors to come in 94 00:04:42,400 --> 00:04:44,800 Speaker 2: and participate in what used to be the one of 95 00:04:44,839 --> 00:04:48,159 Speaker 2: the hottest IPO markets in the world. Right, So what's 96 00:04:48,200 --> 00:04:49,039 Speaker 2: holding it back? 97 00:04:49,560 --> 00:04:52,920 Speaker 3: Oh? Well, okay, so you're absolutely correct that there is 98 00:04:52,960 --> 00:04:55,760 Speaker 3: a lot of interest. In fact, if you think about 99 00:04:55,800 --> 00:04:59,080 Speaker 3: the reason Raley, we had at the end of September 100 00:04:59,120 --> 00:05:03,279 Speaker 3: and early October, we saw a very big jump in 101 00:05:03,360 --> 00:05:06,480 Speaker 3: terms of self bound flow, and I think that illustrates 102 00:05:06,520 --> 00:05:08,599 Speaker 3: the fact that, you know, there's a lot of accumulation 103 00:05:08,680 --> 00:05:12,000 Speaker 3: of wealth in the mainland, a very fast growing middle class, 104 00:05:12,120 --> 00:05:15,640 Speaker 3: and they're looking for diversification, right, And therefore I think 105 00:05:15,680 --> 00:05:18,400 Speaker 3: what we have to do at HKIX is really to 106 00:05:18,520 --> 00:05:21,160 Speaker 3: continue to build primary connect. I know is something that 107 00:05:21,200 --> 00:05:23,000 Speaker 3: a lot of people talk about but that's not the 108 00:05:23,040 --> 00:05:25,880 Speaker 3: only thing. We have a long list of to do 109 00:05:26,320 --> 00:05:29,760 Speaker 3: for how we're going to continue to develop the Connect franchise. 110 00:05:30,160 --> 00:05:33,400 Speaker 2: Okay, what's holding it back? Though I know you can't 111 00:05:33,440 --> 00:05:35,680 Speaker 2: really I'm getting a sense you can't really tell me. 112 00:05:35,760 --> 00:05:39,000 Speaker 2: I mean, where are we in the dialogue with Beijing? 113 00:05:39,200 --> 00:05:41,800 Speaker 2: Because I know they're worried at a during a slowing economy, 114 00:05:41,800 --> 00:05:43,560 Speaker 2: They're worried about outflows. 115 00:05:43,320 --> 00:05:47,440 Speaker 3: Obviously, So I think everything has its moment and to 116 00:05:47,520 --> 00:05:50,080 Speaker 3: make sure that it's successful, you want to capture the 117 00:05:50,400 --> 00:05:54,239 Speaker 3: best moments, right So, Ipeel, you know you're very focused 118 00:05:54,279 --> 00:05:57,440 Speaker 3: on it. I can see the world has gone through 119 00:05:57,480 --> 00:06:02,400 Speaker 3: a couple of years with relatively muted IPO activities. We 120 00:06:02,480 --> 00:06:05,000 Speaker 3: are very happy that we're seeing a strong pickup in 121 00:06:05,000 --> 00:06:07,280 Speaker 3: the Hong Kong market, and therefore, you know, I think 122 00:06:07,320 --> 00:06:09,240 Speaker 3: we just need to continue to build on that and 123 00:06:09,240 --> 00:06:12,799 Speaker 3: make sure that in fact, the strength of the IPO 124 00:06:12,880 --> 00:06:15,760 Speaker 3: market returns. And I think with a stronger base and 125 00:06:16,160 --> 00:06:19,920 Speaker 3: you know, a more robust pipeline, the conditions will be riper. 126 00:06:20,400 --> 00:06:23,240 Speaker 2: Okay, So right now that the conditions are not necessarily right, 127 00:06:23,320 --> 00:06:26,799 Speaker 2: we raised about nine billion this year, I believe five 128 00:06:27,240 --> 00:06:30,200 Speaker 2: and a third billion last year, so it's better than 129 00:06:30,240 --> 00:06:33,040 Speaker 2: last year, but it's way off of twenty twenty. Was 130 00:06:33,080 --> 00:06:36,279 Speaker 2: it twenty there was fifty three billion or something like that, 131 00:06:37,000 --> 00:06:39,640 Speaker 2: So you have a ways to go. So again I'm 132 00:06:39,640 --> 00:06:41,600 Speaker 2: going to come back to the primary connect. Is it 133 00:06:41,640 --> 00:06:43,240 Speaker 2: on the docket for next year? 134 00:06:43,800 --> 00:06:46,520 Speaker 3: Okay? So let's talk about where we are in terms 135 00:06:46,600 --> 00:06:49,800 Speaker 3: of the IPO activities. And I'm very happy to report 136 00:06:49,800 --> 00:06:52,560 Speaker 3: it because last time we spoke, I think, you know, 137 00:06:52,600 --> 00:06:55,240 Speaker 3: in terms of our league table ranking, we are a 138 00:06:55,240 --> 00:06:57,680 Speaker 3: little bit bit sort of at the bottom. 139 00:06:57,400 --> 00:06:58,000 Speaker 1: Of the top ten. 140 00:06:58,000 --> 00:07:03,640 Speaker 3: Shore we say we're now and we have completed a 141 00:07:03,800 --> 00:07:07,840 Speaker 3: very big IPO idea, which is a four point six 142 00:07:07,920 --> 00:07:11,320 Speaker 3: billion US IPO, the second largest in the world this 143 00:07:11,480 --> 00:07:16,120 Speaker 3: year and the largest in the consence. Yeah, since February 144 00:07:16,160 --> 00:07:16,920 Speaker 3: twenty twenty one. 145 00:07:16,960 --> 00:07:18,440 Speaker 2: As Holdings possibly too. 146 00:07:18,920 --> 00:07:20,400 Speaker 3: I think they are about to launch. 147 00:07:20,440 --> 00:07:22,920 Speaker 2: They just announced that they've been Bard approval. 148 00:07:22,560 --> 00:07:25,320 Speaker 3: Going hopefully to bring our total fundraise this year to 149 00:07:25,360 --> 00:07:29,160 Speaker 3: above ten billion US, which I understand, right, compared to 150 00:07:29,240 --> 00:07:31,960 Speaker 3: previous years, it's you know, a little bit, you know, 151 00:07:32,240 --> 00:07:35,520 Speaker 3: sort of slower. However, I think you know, you need 152 00:07:35,560 --> 00:07:38,840 Speaker 3: to look at the relative ranking and for the rest 153 00:07:38,840 --> 00:07:40,720 Speaker 3: of the world. You know, the last two years have 154 00:07:40,760 --> 00:07:45,160 Speaker 3: not been a particularly conducive year of IPO activities, but 155 00:07:45,360 --> 00:07:47,840 Speaker 3: you know, I think we've reached a pivot point and 156 00:07:47,880 --> 00:07:50,040 Speaker 3: I'm certainly seeing momentum pickup. 157 00:07:50,200 --> 00:07:53,520 Speaker 2: So if there's not a deliverable on these other initiatives, 158 00:07:53,600 --> 00:07:56,960 Speaker 2: including what reads was announced earlier this year in April, 159 00:07:57,240 --> 00:07:58,880 Speaker 2: we don't have a date for the beginning of that 160 00:07:59,000 --> 00:08:00,440 Speaker 2: inclusion into the So. 161 00:08:00,560 --> 00:08:04,080 Speaker 3: A lot of enhancements have been announced as you know. 162 00:08:04,320 --> 00:08:08,560 Speaker 3: So besides read Way, we also have we also have 163 00:08:08,960 --> 00:08:11,800 Speaker 3: self bound R and B counter which is in the works. 164 00:08:12,080 --> 00:08:14,440 Speaker 3: And like I said earlier, with all those you need 165 00:08:14,480 --> 00:08:17,800 Speaker 3: to make sure that the plumbing works, and we're working 166 00:08:17,840 --> 00:08:21,360 Speaker 3: together with our friends on the mainland to make sure 167 00:08:21,400 --> 00:08:24,280 Speaker 3: that you know, all the system upgrades, all the infrastructure 168 00:08:24,560 --> 00:08:27,640 Speaker 3: are built in in a way which you will make 169 00:08:27,680 --> 00:08:29,560 Speaker 3: sure that the rollout is very, very smooth. 170 00:08:29,760 --> 00:08:32,199 Speaker 2: Last November we also got an announcement that there would 171 00:08:32,200 --> 00:08:35,520 Speaker 2: be trading in treasury bond futures. We don't have any 172 00:08:35,920 --> 00:08:37,800 Speaker 2: start data that as well. Do you have any update 173 00:08:37,800 --> 00:08:38,000 Speaker 2: for it? 174 00:08:38,080 --> 00:08:40,360 Speaker 3: Well, I don't you know, Okay, I'll give you the 175 00:08:40,400 --> 00:08:44,200 Speaker 3: same answer. Right. We have been working on the technical 176 00:08:44,240 --> 00:08:46,360 Speaker 3: aspects to make sure that you know, the rollout will 177 00:08:46,400 --> 00:08:49,080 Speaker 3: be smooth, and I don't worry about sort of not 178 00:08:49,160 --> 00:08:52,520 Speaker 3: having a date because as you can see right, you know, 179 00:08:52,559 --> 00:08:57,280 Speaker 3: recently we've seen a lot of measures being announced by 180 00:08:57,280 --> 00:09:00,120 Speaker 3: Beijing and all that have a very huge impact in 181 00:09:00,160 --> 00:09:04,479 Speaker 3: the market. Right you saw the rally and early October, 182 00:09:04,559 --> 00:09:08,319 Speaker 3: end of September, early October, and therefore I really don't 183 00:09:08,320 --> 00:09:13,000 Speaker 3: worry about, you know, seeing all these positive momentum build up. 184 00:09:13,640 --> 00:09:15,240 Speaker 3: In fact, you know, we just need to make sure 185 00:09:15,280 --> 00:09:19,000 Speaker 3: that you know, there is a way to be ready 186 00:09:19,080 --> 00:09:21,839 Speaker 3: for it, and not just being technical ready. The market 187 00:09:21,880 --> 00:09:23,400 Speaker 3: also needs to be ready for it. 188 00:09:23,400 --> 00:09:24,960 Speaker 2: I had to ask you what do you think is 189 00:09:25,000 --> 00:09:27,840 Speaker 2: going to be the Trump effect on the Chinese economy 190 00:09:27,840 --> 00:09:32,480 Speaker 2: and how that equates to capital raising, potential action against 191 00:09:32,600 --> 00:09:36,040 Speaker 2: China and the dampening effect possibly on the market here. 192 00:09:36,120 --> 00:09:38,840 Speaker 3: Okay, I know that question will come now to me. 193 00:09:39,640 --> 00:09:41,840 Speaker 3: What we saw is that the week leading to the 194 00:09:41,920 --> 00:09:45,079 Speaker 3: US presidential election and the training volume actually is softened 195 00:09:45,120 --> 00:09:47,480 Speaker 3: a little bit in our market. But as soon as 196 00:09:47,480 --> 00:09:51,600 Speaker 3: the election is over, we saw the volume got back 197 00:09:51,679 --> 00:09:54,640 Speaker 3: up again. So I think, you know, with the presidential 198 00:09:54,679 --> 00:09:58,680 Speaker 3: elections now behind us, there is now sort of the 199 00:09:58,760 --> 00:10:01,000 Speaker 3: market knows how to move on, which is a good 200 00:10:01,040 --> 00:10:03,840 Speaker 3: thing to me. You know, this is not the first 201 00:10:03,920 --> 00:10:06,760 Speaker 3: time US has Trump is the president. We've gone through that. 202 00:10:07,200 --> 00:10:09,640 Speaker 3: What our market has continued to prove is that, you know, 203 00:10:10,080 --> 00:10:12,679 Speaker 3: whatever the conditions are, we have that resilience to make 204 00:10:12,679 --> 00:10:14,000 Speaker 3: sure that we can write the tide. 205 00:10:14,120 --> 00:10:17,160 Speaker 1: That was h k e X CEO Bonnie Chan speaking 206 00:10:17,200 --> 00:10:18,800 Speaker 1: with Bloomberg's Steven Engel.