Promoting our Brand Name
37. We will continue to promote Hong Kong's brand name in financial services. Because of our strengths in the stock and bond markets and asset management business, Hong Kong is an ideal platform for Mainland enterprises and funds to reach out to the international market:
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we are the premier capital formation centre for the Mainland. From 1993, when the first Mainland enterprise listed in Hong Kong, up to the end of last year, 335 Mainland enterprises had raised a total of nearly $1,100 billion through listing here. Mainland enterprises account for some 30 per cent of the total number of our listed companies, with a combined market capitalisation accounting for nearly 40 per cent of the total market. Last year, turnover of their shares represented 46 per cent of the total. In terms of funds raised through initial public offerings in Hong Kong, the top ten enterprises are all from the Mainland. Because Hong Kong's stock market is deep and liquid, the trading in shares of Mainland enterprises listed in both Hong Kong and overseas markets, such as London and New York, often shifts from the latter to Hong Kong soon after the initial public offering. Around 80 per cent of share trading in Mainland enterprises listed in both Hong Kong and the United States, for example, is conducted in Hong Kong;
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Hong Kong is a major asset management centre in Asia. Our asset management business exceeds $3,600 billion. To attract further inflow of new funds, we have abolished estate duty. We have also introduced into this Council a bill to give effect to the proposed exemption of offshore funds from profits tax. The House Committee of this Council has agreed to resume the second reading of the bill next week. These measures will further underpin our position as an asset management centre. With a high savings rate, the Mainland has a huge amount of funds that can be channelled into investment. We are, in addition, exploring with the Central Government the possibility of using Hong Kong to implement a qualified domestic institutional investors scheme; and
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Hong Kong is well-positioned to become Asia's bond centre. The issuance of bonds in Hong Kong by Mainland enterprises is on the rise. As at the beginning of this year, more than 20 Mainland enterprises had issued and listed their bonds in Hong Kong, raising in excess of $65 billion in the process. Over 60 per cent of these proceeds were raised in the last 18 months. We will further improve the basic infrastructure of our bond market. The SFC has now completed its consultation on possible reforms to the prospectus regime, and is studying the views of the public and the industry and the way forward to enhance the existing system.
