Acting Hong Kong Chief Executive Rafael Hui said on Wednesday that Hong Kong stock market has been very buoyant this year with daily turnover at a historical high.
Delivering a speech at the opening ceremony of the 31st Annual Conference of the International Organization of Securities Commissions (IOSCO), Hui said the daily turnover in the Hong Kong stock market was about 30 billion HK dollars (3.85 billion U.S. dollars) on an average since the beginning of this year, some 70 percent above that of the previous year.
He said, the Hong Kong Stock Exchange has helped raise about 21 billion U.S. dollars last year through initial public offerings ( IPOs). As a result, Hong Kong attained the No.1 position in terms of IPO fund raising in Asia and 3rd in the world last year.
He said in terms of total equity fund raised in 2005, Hong Kong ranked 5th in the world and first in Asia.
The Bank of China, which made its debut on the Hong Kong Stock Exchange last week, is one of the world's biggest IPOs in recent years.
He said, Asia is no stranger to volatile and destabilizing capital flows. Since 1998, Asian economies have added a total of more than 1.7 trillion U.S dollars in reserves, run huge current account surpluses, cleaned up the banking sectors and strengthened banking and securities regions.
He said he believed that Hong Kong has learnt its lesson well from the Asia Crisis. He said, the Hong Kong Securities and Futures Commission (SFC) has signed 36 bilateral or multilateral cooperation arrangements with regulatory bodies worldwide.
He said, this is a time for greater vigilance on the part of regulators and market participants, adding financial institutions should be vigilant in managing their risks and securities regulators should be vigilant of possible systemic implications on market liquidity and price volatility arising from the unwinding of large positions taken by hedge funds and other institutional investors, particularly in the more concentrated segments of the market.
Hui said, to improve the quality of information for risk assessment, there is a need for better access to data, especially those relating to financial derivatives and to hedge fund activities, more stress testing to ensure the resilience of the market players, and increased regulatory cooperation across jurisdictions.
He is confident that IOSCO, in collaboration with the international bodies, will continue its work and effort in reducing market vulnerabilities and enhancing resilience of the financial system.