Paul Chan: Hong Kong stock market activity was vibrant in the first quarter, with improvements in the real economy

Ask AI · Why did Hong Kong’s stock market trading volume grow against the trend amid external uncertainty?

Xinhua News Agency, Hong Kong, April 5 — Hong Kong Special Administrative Region Government Financial Secretary Paul Chan Mo-po said in a blog on April 5 that he took stock of Hong Kong’s economic performance in the first quarter of this year. Although the stock market saw a pullback, trading remained active. The IPO market continued last year’s strong momentum, the real economy also showed improvement, and some sectors recorded notable achievements.

Paul Chan said that, dragged down by external factors, Hong Kong’s stock market saw a pullback in the first quarter. The Hang Seng Index fell by about 2% year-to-date, but trading was active. In the first two months, average daily trading value exceeded HK$260 billion, up 17% year-on-year. Entering March, market activity became even more active, with the average daily trading value of Hong Kong stocks exceeding HK$300 billion, an increase of more than 8% compared with the same period last year. This reflects that amid uncertainty, investors increased their allocation of assets here. In addition to viewing Hong Kong as a reliable safe haven for capital, this is also because the Mainland economy is experiencing stable and steady growth, and a large number of high-quality companies have come to list in Hong Kong, providing them with ample investment opportunities.

At the same time, Hong Kong’s listed-company platforms play a key role in financing for cutting-edge technologies such as artificial intelligence, contributing to the country’s technological development and the construction of a modern industrial system. They also attract global capital to gather in these future industries. By March 27, the amount raised had already exceeded HK$103 billion, ranking first globally. Including subsequent fundraisings and so on, the total fundraising scale is about HK$237 billion. Currently, the number of application cases queued for listing in Hong Kong has exceeded 500.

Paul Chan said that Hong Kong is pursuing a “Finance Plus” strategy to support the country’s development of new quality productive forces and to actively contribute to the building of a modern industrial system. Recently, Hong Kong was again confirmed as one of the world’s top three international financial centers. Its score is close to the top two—New York and London—showing that the sustained development of the Mainland economy and the country’s strong support for Hong Kong are the biggest underpinning of Hong Kong’s status as an international financial center.

Paul Chan also said that Hong Kong’s real economy also saw overall improvement in the first quarter, with some sectors recording notable achievements. In the first two months of this year, the value of goods exports increased by nearly 30% year-on-year, with an ideal performance. The foundation for the retail market to recover has become quite evident. In the first two months of this year, the total retail sales value rose by 11.8% year-on-year, marking the tenth consecutive month of growth. The growth rate is noticeably faster than in the fourth quarter of last year, indicating that local consumer confidence is gradually expanding in a positive direction. Online sales have also been booming: in the first two months, they surged 27.5% year-on-year. This has helped drive the development of digital support industries such as electronic payments, logistics, and data analytics, injecting new momentum into the retail ecosystem.

In addition, the labor market has remained stable. The unemployment rate edged down to 3.8%. Employment in the retail and catering industries improved, and overall employment income continued to rise. Together with the improvement in sentiment in the stock market and the residential property market, this provides support for local consumption.