Blog

Last week, I visited Madrid, Spain, and London, the United Kingdom (UK) respectively. For this visit, I led a delegation of local tech startups. Our goal was to engage with the innovation and technology (I&T) sectors as well as members of various organisations, businesses and investment communities in these countries, so as to open up new markets and seek new business opportunities. On the other hand, I briefed the local political and business circles on the latest developments of Hong Kong as an international financial, shipping, trade, and I&T centre, highlighting the new potential and opportunities arising from the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) development.

The US Federal Reserve cut interest rates by 0.5% last week, which was the first rate cut in more than four years. Along with the fact that a number of major central banks around the world had also cut interest rates earlier, this has reinforced the financial market’s expectation of a gradual decline in interest rates around the world. The relaxed financial environment has also been conductive to boosting the asset market sentiment and enhancing the operating environment of the industrial and commercial sectors. Although it can be expected that the trend of interest rates in Hong Kong will be broadly in line with that of the United States under the Linked Exchange Rate System, the pace and magnitude of the downward adjustment will depend on the capital flow and market conditions in Hong Kong. The Hong Kong stock market has rebounded to its highest level in more than two months. The Hang Seng Index closed at 18,258 points last Friday, with a cumulative increase of close to 7% in six consecutive trading days. Market turnover also improved, with trading volume reaching HK$176.8 billion last Friday, a new high in nearly four months.

Technological innovation can drive leapfrogging development in the economy and industries, but this transformative momentum requires financial support and must leverage the power of finance. The research and development of cutting-edge technologies, as well as their transformation into practical applications, often take years—ranging from the incubation of ideas to the realisation of results, and then to sustained growth. This process is often complex and filled with challenges. Tech companies are often vulnerable during their startup and early growth phases. The key to unleashing financial power to support innovation and technology (I&T) development and building a thriving I&T ecosystem lies in the precise and efficient matching of capital with the risk appetites, investment focuses, and the liquidity needs of funders. By activating the front-end of the financial services chain, we can enable more private equity funds, venture capital funds, and long-term capital to better support startups, thereby injecting greater momentum into the development of Hong Kong’s I&T industries.