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The View
OpinionComment
James A. Fok
James A. Fok

The View | To stay on top, HKEX must diversify and innovate in search of more successes like the Tracker Fund

  • The Chinese mainland and innovations like the Tracker Fund, which celebrates its 20th anniversary, aided Hong Kong’s rise as Asia’s global financial centre. A natural evolution would be for HKEX to become the region’s one-stop shop

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The HKEX corporate flag flying alongside the Chinese flag outside the Exchange Square complex in Hong Kong, on September 16. China’s growth is slowing but the rest of Asia is still among the fastest-growing regions for capital markets issuance and wealth creation. Photo: Bloomberg
James A. Fok
November 12 marks the 20th anniversary of the launch of Hong Kong’s Tracker Fund. It was the first exchange-traded fund (ETF) to list in the region and the largest initial public offering (IPO) in Asia excluding Japan at the time. It remains the largest and most liquid ETF in the Hong Kong market, and a popular and low-cost vehicle for investors to gain exposure to a broad spectrum of Hong Kong-listed companies.
Product innovations such as this have helped Hong Kong develop into Asia’s leading global financial centre, top the global rankings for IPO funds raised in six of the past 10 years, and offer the broadest range of listed financial products in the region.
Hong Kong’s proximity to, and connection with, mainland China have also been a cornerstone of its success. Hong Kong’s capital markets have reaped the rewards of China’s economic growth over the last three decades.

We appear to be entering a less benign and more challenging era. In the face of a rapidly shifting global investment landscape, we must anticipate market needs, innovate and evolve to stay competitive and relevant.

As China’s economic growth slows from the heady pace of former years, we must look further afield to build new opportunities for Hong Kong. Expanding the horizons of the Hong Kong Exchanges and Clearing (HKEX) will not only support Hong Kong’s long-term sustainability as an IPO centre, but also address growing demand for investment diversification from new investors in the Hong Kong market, many of whom have been attracted by the Stock Connect schemes.
Fortunately, I do not think we need to cast our eyes too far to find these opportunities: Asia, outside China and Japan, has the highest growth in capital markets issuance in the world and is one of the fastest growing regions globally in terms of wealth creation. Only four of the 10 fastest growing economies in the Asian time zone are acceptable jurisdictions for listing in Hong Kong.
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