Individuals sporting face masks crossing a road at Hong Kong’s Wan Chai district on Feb. 16, 2021.
Zhang Wei | China Information Service | Getty Photos
Hong Kong’s plan to extend the stamp obligation on inventory buying and selling is not going to hurt the competitiveness of the town’s monetary markets, Monetary Secretary Paul Chan advised CNBC on Friday.
Chan stated in his finances speech on Wednesday that the federal government will elevate the stamp obligation paid on listed inventory trades from 0.1% to 0.13%. The announcement sparked a sell-off in shares of the operator of the town’s inventory trade, and the broader Hong Kong market.
“The Hong Kong market has been doing very nicely, very energetic, the quantity has gone up fairly a bit,” Chan advised CNBC’s Emily Tan.
“So, maybe that is the time for us to extend a little bit bit on the stamp obligation which is not going to hurt our competitiveness and on the similar time will carry further income to the federal government at this juncture,” he added.
The monetary secretary stated Hong Kong authorities have lately launched totally different initiatives to reinforce the competitiveness of the town’s inventory market. That features permitting listings of dual-class shares and attracting U.S.-listed Chinese language firms to hunt a secondary itemizing in Hong Kong, he stated.
Hong Kong in 2020 was one of many prime markets for listings globally as Chinese language corporations resembling e-commerce big JD.com and gaming firm NetEase raised funds by way of secondary listings.
In whole, the town’s inventory trade noticed 132 preliminary public choices value $32.1 billion, and 199 additional choices value $62.9 billion final yr, in response to information compiled by consultancy PwC.
With such “strong” capital markets exercise, elevating the buying and selling stamp obligation could provide Hong Kong “a fast answer” to extend its tax income within the brief time period, stated Stanley Ho, a accomplice for company tax advisory at consultancy KPMG China.
“Nevertheless, it’s also necessary for Hong Kong’s capital markets to remain aggressive with international monetary markets, lots of that are trending in direction of lowering or eradicating such duties,” Ho stated in a press release after Chan’s finances speech.
Chan stated he stays assured of Hong Kong’s prospects as a global monetary heart.
He defined that the federal government is engaged on selling Hong Kong as a middle for sustainable and inexperienced finance, growing additional the town’s mounted earnings markets and inspiring extra exercise within the asset and wealth administration sectors.
On the inventory market sell-off after his announcement of the buying and selling tax hike, Chan stated Hong Kong wasn’t the one one experiencing a “downward adjustment” following a earlier run-up.
“So, I’d not be bothered by non permanent fluctuations out there. What we consider is we proceed to work arduous to reinforce the providing of our market to additional improve the competitiveness and attractiveness of the Hong Kong market,” he stated.
“We are going to proceed to draw influx of worldwide capital.”