Francis Leung, co-Chairman of AMTD Global Advisory Committee, Chairman of the Chamber of Hong Kong Listed Companies, member of the 12th CPPCC National Committee, known as “Father of Red Chips” and senior investment banker, delivered a keynote speech at the third AMTD Global Advisory Committee meeting. He went over the historical development of Hong Kong’s capital market, and discussed with the guests how Hong Kong can leverage its unique advantages to contribute to the development of the Greater Bay Area, as well as the prospects and challenges ahead for the Greater Bay Area.
Francis Leung, co-Chairman of AMTD Global Advisory Committee, Chairman of the Chamber of Hong Kong Listed Companies delivered the keynote speech
Mr. Francis Leung has served two international investment banks, Wardley Securities, a subsidiary of HSBC and Citicorp International (now Citibank), and later founded the Peregrine Investment Group, which promoted the successful listing of several red chip companies listed in Hong Kong Stock Exchange. He was recognized by the industry as the “Father of Red Chips.” Mr. Leung is also a well-known angel investor. As the co-Chairman of the AMTD Global Advisory Committee, he witnessed the development and growth of AMTD Group. Having deeply involved for 40 years in Hong Kong’s financial industry and international capital market, Mr. Leung has witnessed the ups and downs of Hong Kong’s capital market. Particularly, Mr. Leung pointed out that he has witnessed the rapid development and achievements in the past few years and acknowledged the efforts made by AMTD Group on the innovation and development of the Hong Kong capital market. “I am happy and proud to be a member of AMTD Group!”
Reflecting on the past, Mr. Leung pointed out that the development of Hong Kong’s capital market is largely due to China’s reform and opening up. In the early 1980s, Hong Kong’s capital market was dominated by European capital. By 1990s, US investment banks began to expand globally, especially when Chinese companies began to list overseas in the form of “red chips” and “H shares.” In the early days, these companies chose to go public in both Hong Kong and the United States, which led to a large number of institutional investors and US investment banks setting up branches in Hong Kong. Hong Kong’s capital market is a free market, with a very high proportion of participants being institutional investors, which helped established the necessary depth and scale. In addition, equities of these enterprises can be sold globally through listing in Hong Kong, and this gradually made Hong Kong the top choice for Chinese companies to raise funds from overseas. The listing reform of the Hong Kong Stock Exchange in 2018 has further attracted more companies in new economic sector to list in Hong Kong.
With a growing trend of Chinese companies listing in Hong Kong, Chinese financial institutions have started entering the Hong Kong capital market since 2008. From the fierce competition presented by these Chinese and foreign investment banks, how did AMTD Group, as the largest private independent investment bank in Hong Kong and Asia, establish its niche and create a leading position? Mr. Leung believed that there are three main reasons. First of all, AMTD pays attention to technological innovation. There is a large amount of data in the financial market, if these data can be used reasonably and carefully to develop special products for customers, that will definitely enhance services and customer experience. Secondly, AMTD offers a wide variety of products for different types of corporate clients. Although Hong Kong’s equity market has a wide reach, its depth is not enough. There are still rooms for improvement in terms of liquidity, trading system, etc. Therefore, many companies were unable to get consistent services. To address this, AMTD Group utilized the its diverse and rich ecosystem to provide professional capital market products and resources to meet the needs of clients, thus establishing a strong competitive advantage. Thirdly, as a well-established Hong Kong-funded financial institution, AMTD Group has a wide range of local resources and international networks, years of professional experiences, hence its growth potential is unlimited.
Mr. Leung further pointed out that under the context of Greater Bay Area development, the rising of enterprises from this region can provide great opportunities for Hong Kong, but at the same time many challenges as well. Hong Kong is backed by a vast international capital market. How to integrate its resources and take its advantages is a question worthy of discussion and consideration. Hong Kong has been actively serving the Greater China region for the past three decades and is able to play a more specific role in the Greater Bay Area. Hong Kong has an established financial infrastructure, while the Greater Bay Area has a large population, strong consumption power, and a developed technology ecosystem. Hong Kong can improve on its connector role between this region and the international capital market, so in addition to the mature IPO market, it can also actively offer private equity financing to technology companies, and serve corporate clients at all stages, thus building a complete ecosystem.
Looking ahead, Mr. Leung is greatly optimistic about the prospects of the Greater Bay Area and Hong Kong, expecting Hong Kong’s financial institutions to have more opportunities to contribute to the economic development of the Greater Bay Area. He firmly believes that with the vigorous development of China’s economy and its strategic plan to build the Greater Bay Area, Hong Kong will continue to exercise its advantages and contributes to the bright future of Greater Bay Area. He wished AMTD Group, under the leadership of its Chairman, Calvin Choi, with the support of his professional team, success in closely capturing the opportunities coming from the development of the Greater Bay Area and the Hong Kong capital market, embracing the new economic momentum, and taking a leading role in the new generation of the financial industry.