Hong Kong will deliver a new policy address on October 16. Against this background, the DAB published a proposal entitled“Enhancing the status of Hong Kong as a centre for new listings and financing”, which put forward six major proposals aimed at improving the listing and financing system in Hong Kong, to attract more enterprises to list in Hong Kong, further consolidating Hong Kong’s status as an international capital-raising hub and an international financial centre.
Eastern IC
DAB’s six major recommendations include lowering the financial requirements for listing, setting two-way targets for approval and response, introducing a“Test-the-water temperature communication” mechanism, lowering the stock stamp duty, and the fund of the Hong Kong Investment Corporation subscribing to high-quality new shares, and explore ways to improve the regulatory framework and approach. Among them, the issue of reducing the stock stamp duty is particularly attracting attention and has become the focus of heated discussion in the market.
Stock stamp duty has become one of the hot topics recently. The DAB’s proposal includes a reduction in stamp duty on shares, which is aimed at reducing transaction costs and attracting more foreign capital to the Hong Kong stock market. In addition, Acca Hong Kong, pricewaterhousecoopers and the Hong Kong Federation of Securities and futures professionals have also made proposals to reduce or eliminate the stock stamp duty.
It is worth noting that on November 15 last year, the Legislative Council of the Hong Kong Special Administrative Region (HKSAR) passed an amendment ordinance to reduce the rate of stamp duty on stocks from 0.13% to 0.1% , to implement the measures proposed by the chief executive in his 2023 policy address to enhance the competitiveness of the stock market.
As for the Hong Kong market, Socgen’s global chief strategist said the gyrations confirmed the logic of a reversal rather than a one-off rebound. He expects October to see Hong Kong and A-shares moving from their recent bearish rallies to more sustained volatile reversals.
Morgan Stanley also said Chinese stocks could rise a further 10-15 per cent if Beijing announced more support measures in the coming weeks. Standard chartered is cautiously optimistic about the near-term momentum or sustainability of the Hong Kong stock market, saying the Hang Seng Index is still fairly valued and investors are still underweight.