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Readers of my blog might remember that last December I wrote a letter to Santa – and he gave us a pretty good year. So I was thinking whether or not to write to Santa again this year, and considered asking my daughter for her thoughts. After all, at HKEx we are all superheroes now, superheroes having been the theme of our annual dinner last Thursday. But I knew my daughter would just say I should get better at soccer first before thinking I'm a superhero. And she would probably be right. Although my colleagues at HKEx are very hardworking and capable they don’t have super powers, and anyway, superheroes don’t give gifts.
So, I'd better get my letter off right away before the sleigh leaves the North Pole!
Dear Santa,
It’s so good to write to you again after all the wonderful gifts you gave to us last year. In fact, it was a pretty great year for HKEx overall.
The entire staff at HKEx were good boys and girls, and worked hard during the first full year of Shanghai-Hong Kong Stock Connect (can you believe it’s a year old already?). We are now busy improving this important bridge we built by working on access roads, signs, lighting and more while getting ready for the opening of another bridge. This is also the first full year the London Metal Exchange has operated as a truly commercial exchange, and we are celebrating the first anniversary of the launch of LME Clear, a brand new clearing house we built in Europe. LME and LME Clear are now important contributors to the financial performance of the group this year.
Of course, like in any year, there were some trials and tribulations. 2015 was a year of two halves for the domestic A share market, which has become increasingly important to our own market after Stock Connect. The first half saw the most bullish run in A shares since the global financial crisis and the second half witnessed one of the most dramatic market routs in recent years. The good news is the Hong Kong market withstood the volatility, proving again that it is a mature, reliable, and sophisticated market. It’s really great to be working in such a strong and respected financial centre, Santa, so I’m very grateful about that.
We also rolled out several new products this year, which was only the beginning of our plan to build a critical mass of new products primarily in derivatives across different asset classes, with an increasing focus on attracting new investors from the Mainland. We do not expect these products to generate immediate trading success, though. I think of it a little like a carnival: people won’t show up to a carnival with just one or two shows, it needs to have a wide variety of performances, games and fun that draw people from near and far. Our new products represent the first couple of shows at the carnival, but pretty soon I hope we can grow into one of the biggest and best carnivals around! We just launched our second batch of LME mini contracts, as well as 34 new stock futures contracts. As we roll out more games, we expect more crowds to come and enjoy them, particularly from the north.
But back to my wish list. This year, I’m hoping to find under the Christmas tree vigorous market support as we roll out our Volatility Control Mechanism and Closing Auction Session next year. These enhancements will strengthen our market structure and align ourselves with international market practices. On top of this, I wish that we work hard to strengthen our market quality. You know the theme of our annual staff dinner was superheroes. In reality we can’t count on heroic characters to protect our market though, so we all need to pitch in to ensure our market regulation is robust. And Santa, don’t forget we will soon be announcing our next three year strategic plan, which we’re really excited about. We’ll accept any gifts that help us implement our plans! And just one more thing that would mean a lot… HKEx lost to the Shenzhen Stock Exchange 1-0 in our soccer match about a week ago. The captain tapped me on the shoulder and told me to get into the game in the second half but I only touched the ball once. Maybe you could give us a goal or two next year? :)
Finally, Santa, I want you to be good to all my colleagues at HKEx. Each year they work tirelessly to ensure HKEx remains one of the top exchanges in the world, and they are among the reasons Hong Kong is a respected global centre of finance. They deserve a lot of generosity this year, so I hope you are good to them. If you are still thinking about gifts for them, perhaps I could offer a suggestion - toy trains are good, but the trains coming over the Connect bridges are fabulous!
I’d like to thank them too, Santa, and everybody else who has supported HKEx this year. We have a busy year ahead, but now’s the time to kick-back, relax, and enjoy good times with family and friends over the holiday season. I wish everyone good health and prosperity in the year ahead.
Sincerely,
Charles
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Happy holidays and all the best in 2016!
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