Blog
Riding the Waves of Global Market Volatility
Global markets have continued to experience volatility, particularly following the recent downgrade of the US sovereign credit rating, which has led to a sharp rise in Treasury yields. This situation has renewed focus on the stability of US dollar-denominated assets and the necessity for risk diversification. In the face of this uncertain external environment, our country has remained firmly committed to high-level opening up, providing international investors with a predictable and stable investment environment. Recently, several major foreign financial institutions which visited the Mainland expressed confidence in our country's development prospects, and pledged to deepen their engagement with the Mainland market and increase their investments in China.
As a “super connector” between the Mainland and the world, Hong Kong is actively seizing opportunities in this era. Last week, two major thematic financial forums were held in Hong Kong, marked by robust fundraising activities and an impressive gathering of domestic, Mainland and international guests from various sectors. Many seasoned foreign investors indicated their intention to leverage Hong Kong to expand their asset allocations in the Mainland and across the Asian region.
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| Last week, I spoke at the Asia Metals Seminar 2025 hosted by the London Metal Exchange (LME), a subsidiary of the Hong Kong Exchanges and Clearing Limited HKEX. |
The London Metal Exchange (LME), a subsidiary of the Hong Kong Exchanges and Clearing Limited (HKEX), organised a seminar in Hong Kong last week, bringing together around 400 industry peers from across the globe. While supply chains are facing significant challenges amid the shifting global trade landscape, new opportunities are also emerging. As Mainland is one of the world's largest metal markets, there is a real and substantial demand for establishing warehouses in Hong Kong to support the efficient delivery of non-ferrous metal trades in the market. Since LME’s inclusion of Hong Kong as an approved delivery point within in its global warehousing network early this year, seven warehouses have already been approved. Industry experts have pointed out that Hong Kong, under “one country, two systems” arrangement, not only has a legal system and financial services that facilitate business operations, but also possesses the unique advantage of connecting with both the Mainland and the world. In particular, its superior logistics network and transportation capabilities have enabled the fast and reliable delivery for various metal transactions. This has encouraged clients and warehouse operators to expand their operations in the city.
Meanwhile, Hong Kong’s IPO market has been bustling. Last week, it welcomed the largest global IPO of the year so far. Since the beginning of this year, the total funds raised through IPOs in Hong Kong have exceeded HK$76 billion, an increase of more than seven times compared to the same period last year, and approaching 90% of last year’s total IPO value.
Meanwhile, the inaugural International Forum for Patient Capital, organised by the Hong Kong Investment Corporation Limited (“HKIC”), gathered patient capital institutions from 15 jurisdictions, covering Europe, the US, Japan, and the Global South including the Middle East. The Forum brought together 80 institutions with a total asset under management of over US$20 trillion. These patient capital managers expressed optimism about the development of technology and innovation in our country and the Asia-Pacific. They considered that it is now an opportune time for investing into this region. They aim to connect with high-potential tech companies through the HKIC. Many participating tech representatives said that they were able to engage with potential investors and long-term capital. The event sought to connect capital with tech companies with a view to supporting the commercialisation of research outcomes.
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| Attending the inaugural International Forum for Patient Capital organised by the Hong Kong Investment Corporation Limited. |
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| Attending the listing ceremony of Contemporary Amperex Technology Co., Limited (CATL) last week. |
Furthermore, we are actively enhancing Hong Kong’s appeal as the preferred location for international headquarters. Last Friday, the legislation that introduces a company re-domiciliation regime officially came into operation, allowing companies incorporated outside Hong Kong to apply for re-domiciling to Hong Kong in a more convenient and cost-effective manner. On the day of the announcement, a major international insurance company indicated its intention to re-domicile to Hong Kong. The market expects that companies in such sectors as maritime may follow suit.
Notably, another significant development is on the horizon: the Signing Ceremony of the Convention on the Establishment of the International Organization for Mediation (IOMed) will take place in Hong Kong this Friday. The IOMed headquarters will be located in Hong Kong, a key initiative supported by the Central Government to establish the city as a centre for international legal and dispute resolution services in the Asia-Pacific region. The event will be attended by high-ranking officials and representatives from nearly 60 countries and regions, along with 20 international organisations, including the United Nations. An international mediation forum will also be held in the afternoon, discussing topics such as “State-to-State Dispute Mediation” and “International Investment and Commercial Dispute Mediation”. This event marks a significant milestone for Hong Kong’s mediation professional services on the international stage.
We will fully support the establishment of the IOMed, which will enhance Hong Kong’s attractiveness in international trade and commerce. This will also facilitate economic and trade cooperation among countries along the Belt and Road, further reinforcing and elevating Hong Kong's position as an international trade centre.
In the face of a complex and evolving geo-economic landscape, we will continue to safeguard the integrity of Hong Kong’s financial markets. Thanks to the collective efforts of the HKSAR Government, regulatory bodies and the industry over the years, Hong Kong's financial system has built up strong buffers and resilience, capable of withstanding various external risks. Last week, Fitch Ratings published a report which affirmed Hong Kong’s strong credit fundamentals, and maintained its credit rating with a “Stable” outlook.
Some rating agencies had previously expressed concerns and even held a negative outlook regarding the Mainland's economy and local governments’ fiscal conditions; they made similar assessments about Hong Kong’s credit ratings based on the city’s close economic and trade ties with the Mainland. However, facts and data have demonstrated that the Mainland’s economy has continued to progress steadily amid global uncertainty. Our country possesses ample policy room and tools to address various challenges. In light of the current geopolitical challenges, China has maintained a stable and predictable policy environment, and continued to pursue high-level opening-up. It has achieved many breakthroughs in technological innovation, green transformation and the digital economy, thus serving as a crucial driver of global growth. Strengthening ties with the Mainland is a significant advantage for Hong Kong’s long-term development.
From the impressive performance of the Hong Kong stock market this year, to the rising number of domestic and international companies establishing international headquarters, R&D centres and regional offices in the city – these reflect the confidence of global investors and businesses in Hong Kong. Amid profound shifts in the global landscape, we will remain agile. We will strive to strengthen ties with traditional markets while actively expanding into emerging markets in the Global South. This will amplify our role as a “super connector” and “super value-adder”.
May 25, 2025
