When we think about China, a lot of concentration is towards the equity side. But in the coming years, there will be a natural need to diversify into fixed income, commodities, and other alternative asset classesGregory Yu, Head of Markets, Hong Kong Exchanges and Clearing Limited
- About The Video
- Transcript
Hong Kong’s capital markets have recovered strongly over the past two years, reinforcing its position as a superconnector between the Chinese mainland and the rest of the world. At the same time, geopolitical uncertainty, shifting interest rates, and changing investor behavior are creating new demands for diversification across markets and asset classes.
In this episode, Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX), sits down with Jasper Yip, Head of Greater China at Oliver Wyman, to discuss how these shifting global dynamics are shaping Hong Kong’s capital markets strategy. Greg shares how HKEX is responding beyond its strong equities foundation, through product innovation, which includes new technology-focused indices, short-dated options, and exchange-traded products, while using regional connectivity and AI to expand investor access and choice.
Their conversation also covers HKEX’s fixed-income and currency ambitions as part of a broader effort to build a first-class multi-asset ecosystem in Hong Kong.
INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.
Jasper Yip
Welcome to INFocus. Today, with us, we have Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX).
The Hong Kong capital market has recovered remarkably over the last two years, and it has retained its leadership position as the global leader for IPO venues. Yet, at the same time, we are also navigating geopolitical challenges as well as uncertainty from global interest rates. Greg, thank you so much for joining us today.
Greg Yu
Thank you very much for having me.
Jasper
Why don’t we kick it off with the global business order? We all talk about everything, ranging from geopolitical tension, higher-for-longer interest rates, to supply chain reconfiguration. Greg, let us know how you think these topics have been shaping investors' behavior globally. What does this really mean in terms of global asset allocation into China?
Greg
First of all, with the overall dynamics of the market, more and more so when we talk to investors, the top thinking is definitely on diversification. I think that’s the natural need.
From that standpoint, people are looking for more available instruments and diversity in terms of geographical area of allocation. With that in mind, from an investment or exchange standpoint, we need to develop more products, and particularly products that are geared towards China, as that is a market that nobody can ignore.
Further to that, I think historically when we think about China, a lot of concentration is towards the equity side of the investments. But I think in the coming years, there will be a lot of natural needs to diversify into fixed income, commodities, and other alternative asset classes. So, as an exchange, what we are seeing is that investors are looking for more available tools for them to do their investment allocation.
Jasper
I love the point about diversification. Particularly when it comes to instruments, I have been observing a lot of very interesting partnerships that were announced between the HKEX and other regional exchanges. For example, you have new indexes that track a mixed basket of Hong Kong and overseas underlying. Maybe you can just stay on that point and share with us a little bit more about how these new products would help and cement Hong Kong as a superconnector in your vision?
Greg
Our market is certainly growing. We’re seeing a lot more initial public offerings (IPOs) and a lot of companies listing in our market. With that in mind, we feel that the benchmarks for the Hong Kong market could extend to a wider variety, and that’s why we are firmly developing the index business.
To think about that, the first thing that we should be focusing on is what the Hong Kong market represents at the current moment. Technology is certainly a big play. That’s why in late 2025, we launched a Tech 100 index, which is an HKEX brand labeled as the first equity index. And it has hundreds of constituents that are focusing on various technology sectors such as AI, semiconductors, and so forth. That gives rise to investors coming to the Hong Kong market with a benchmark that is more focused on the technology front.
On top of that, we need to address the investment needs, because ultimately the indices are benchmarked for people for reference, especially towards the exchange-traded fund (ETF) tracking or derivatives products. What we see is that there is a huge demand coming from the Chinese mainland investors looking to invest externally in offshore markets. That’s why we are doing more of these co-branded and co-geographical location markets indices, such as the ones that we’ve recently launched with Bursa Malaysia on the large cap — 60% Hong Kong underlying and 40% of the Malaysian underlying. We’ve also done one with the Korea Exchange (KRX). On the South Korea side, again, with the Hong Kong underlying of 60% and 40% of their semiconductor sector. So again, with these types of benchmarks developed, it would give rise to more opportunities for investors to properly track the Hong Kong market as well as the offshore markets in a combined way.
Jasper
That’s very exciting and interesting at the same time. Since we already started the conversation on AI, would you mind sharing with us a little bit more about how the emergence of such technology is shaping the strategy, as well as the operating and business models, for a traditional exchange like yours?
Greg
On AI, we’re noticing a lot of the “protail” — what we call “professional retail” — investing into the equities markets, particularly going through an AI or application programming interface (API) type of setup to gain access into the equities market. As an exchange, how do we provide data that is much more accessible to these AI agents, so that retail investors can invest in our markets more easily? When they do their own trading, they have all the information at their fingertips to do the allocation.
Jasper
I’m definitely going to take away with the term “protail” from you and use it in the future.
Since we’re on this topic about retail investors, tell us a little bit more about your plan for product development. For example, we observed the short-dated options contract that you have launched recently. How are you thinking about creating this ecosystem that attracts retail investors?
Greg
When you think about the overall global dynamics, retail investors have become a really strong force in the investment side, especially on exchange-listed products, whether they’re derivatives or exchange-traded products (ETPs). To develop that, you really need to look into the investor behavior so that you can look into developing the right set of tools to meet that particular type of demand. So, when we observe the overall global trend is that more of these products are shorter dated, helping the investors to do their asset allocation in a much more efficient way. With that in mind, we have developed shorter-dated options. When I look into our current market, we have a very vibrant cash equities market. But correspondingly, on the derivatives market, there are many instruments that we can create, based upon this vibrant cash equity market, to be adopted by retail investments. So short-dated options on both single stocks and indices.
On the ETP side, we have been growing significantly with the leveraged and inverse ETFs, which are now firmly a prominent product on our product shelf. But on top of that, I think it’s important to acknowledge that it’s not only just the instruments — I’m talking about basically the listed options and futures or ETPs — but in fact, as I mentioned, AI is also an important aspect in terms of catering to the retail demand. When we look at the overall full spectrum, we need to make sure that our innovation is truly adapting towards the retail user base, so that we can offer the right platform for them to do their asset allocation.
Jasper
I really like the way that you frame it and think about it. It’s really about solving the needs of the retail investors at the core. Then it drives into what kind of product ecosystem that you need to build, and technology would come together as an enabler rather than being a strategy on its own. All of these are great because it’s building on the very strong cash equity foundation that we have in Hong Kong.
Now, maybe let’s segue a little bit. Hong Kong has a very ambitious fixed income and currency (FIC) roadmap. Big plans. How are you, as HKEX, thinking about capturing this opportunity, but even more importantly, driving the market development?
Greg
Investors are looking for diversification, as I mentioned. With that in mind, it’s the diversification of geographical location as well as instruments. When you look into a single market, it needs to broaden further into the ecosystem across equities, fixed income, and commodities. If we are to develop a first-class multi-asset ecosystem for Hong Kong, we need to do all of that. Particularly on fixed income, the HKEX has a strong role to play, and, for example, in issuances. Boosting more fixed-income issuances in Hong Kong. HKEX has been priding ourselves that we are now a top leader in the IPO for the equity side. Correspondingly, on the fixed income side, we should be able to attract similar types of issuers to come to Hong Kong and do their Renminbi bond listings and subsequently drive the secondary market to a more vibrant state.
Jasper
You touch on the primary market, and then you’re about to jump into the secondary market. Now this is very interesting. As we all know, building a market is all about liquidity, and liquidity would attract more liquidity. Tell us a little bit more about your new initiatives. For example, the OTC Clear’s acceptance of Chinese government bond (CGB) as collateral and a new five-year CGB Futures contract. How are you thinking about all these new initiatives?
Greg
Currently, the Chinese government bond trading is relatively nascent in the offshore market, in comparison to its huge onshore market. That’s because there isn’t a clear price discovery of the offshore Renminbi curve. Now having the CGB futures, that instrument in itself will now allow offshore participants to do a price discovery on the five-year Chinese government bond. Now you have more observable pricing with regard to the yield curve. And with that, for issuers, whether it’s a global corporate or infrastructure bonds, there will be a basis for them to now start to issue their debt instrument.
When you do that as one of the steps that builds the ecosystem, then naturally, there should be more secondary market trading because now you have a lot more supply to meet the demand on the investment side. We’re doing all of these on a step-by-step basis. On top of that, from a liquidity perspective, we’re also doing OTC repo clearing down the road. With that, people can utilize the CGBs. If they do invest in CGBs, they can take it out and then do the repo transactions and get the liquidity. Again, that would boost secondary market trading. So overall, every single step that we do is to ensure that we are creating a vibrancy in the overall fixed income market.
Jasper
As Oliver Wyman, we have been pretty grateful that we had the opportunity to support you and your colleagues on the FIC journey. If you may, would you share a little bit of what impact you think we might have generated for your team?
Greg
We have many projects that we have worked on together. I think particularly what we're most impressed about Oliver Wyman is that you’re very patient in terms of listening, because our market is certainly unique, and you’re not giving us a one-size-fits-all solution. Going through the process of working with Oliver Wyman, we learn a lot from you, and we learn a lot about ourselves as well.
Jasper
Excellent. Thank you so much, Greg, for that. But also more importantly, sharing a lot of your very thoughtful perspectives on how the HKEX is capturing the opportunities in the market. Thank you again for participating
Greg
Thanks a lot.
This transcript has been edited for clarity.
- About The Video
- Transcript
Hong Kong’s capital markets have recovered strongly over the past two years, reinforcing its position as a superconnector between the Chinese mainland and the rest of the world. At the same time, geopolitical uncertainty, shifting interest rates, and changing investor behavior are creating new demands for diversification across markets and asset classes.
In this episode, Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX), sits down with Jasper Yip, Head of Greater China at Oliver Wyman, to discuss how these shifting global dynamics are shaping Hong Kong’s capital markets strategy. Greg shares how HKEX is responding beyond its strong equities foundation, through product innovation, which includes new technology-focused indices, short-dated options, and exchange-traded products, while using regional connectivity and AI to expand investor access and choice.
Their conversation also covers HKEX’s fixed-income and currency ambitions as part of a broader effort to build a first-class multi-asset ecosystem in Hong Kong.
INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.
Jasper Yip
Welcome to INFocus. Today, with us, we have Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX).
The Hong Kong capital market has recovered remarkably over the last two years, and it has retained its leadership position as the global leader for IPO venues. Yet, at the same time, we are also navigating geopolitical challenges as well as uncertainty from global interest rates. Greg, thank you so much for joining us today.
Greg Yu
Thank you very much for having me.
Jasper
Why don’t we kick it off with the global business order? We all talk about everything, ranging from geopolitical tension, higher-for-longer interest rates, to supply chain reconfiguration. Greg, let us know how you think these topics have been shaping investors' behavior globally. What does this really mean in terms of global asset allocation into China?
Greg
First of all, with the overall dynamics of the market, more and more so when we talk to investors, the top thinking is definitely on diversification. I think that’s the natural need.
From that standpoint, people are looking for more available instruments and diversity in terms of geographical area of allocation. With that in mind, from an investment or exchange standpoint, we need to develop more products, and particularly products that are geared towards China, as that is a market that nobody can ignore.
Further to that, I think historically when we think about China, a lot of concentration is towards the equity side of the investments. But I think in the coming years, there will be a lot of natural needs to diversify into fixed income, commodities, and other alternative asset classes. So, as an exchange, what we are seeing is that investors are looking for more available tools for them to do their investment allocation.
Jasper
I love the point about diversification. Particularly when it comes to instruments, I have been observing a lot of very interesting partnerships that were announced between the HKEX and other regional exchanges. For example, you have new indexes that track a mixed basket of Hong Kong and overseas underlying. Maybe you can just stay on that point and share with us a little bit more about how these new products would help and cement Hong Kong as a superconnector in your vision?
Greg
Our market is certainly growing. We’re seeing a lot more initial public offerings (IPOs) and a lot of companies listing in our market. With that in mind, we feel that the benchmarks for the Hong Kong market could extend to a wider variety, and that’s why we are firmly developing the index business.
To think about that, the first thing that we should be focusing on is what the Hong Kong market represents at the current moment. Technology is certainly a big play. That’s why in late 2025, we launched a Tech 100 index, which is an HKEX brand labeled as the first equity index. And it has hundreds of constituents that are focusing on various technology sectors such as AI, semiconductors, and so forth. That gives rise to investors coming to the Hong Kong market with a benchmark that is more focused on the technology front.
On top of that, we need to address the investment needs, because ultimately the indices are benchmarked for people for reference, especially towards the exchange-traded fund (ETF) tracking or derivatives products. What we see is that there is a huge demand coming from the Chinese mainland investors looking to invest externally in offshore markets. That’s why we are doing more of these co-branded and co-geographical location markets indices, such as the ones that we’ve recently launched with Bursa Malaysia on the large cap — 60% Hong Kong underlying and 40% of the Malaysian underlying. We’ve also done one with the Korea Exchange (KRX). On the South Korea side, again, with the Hong Kong underlying of 60% and 40% of their semiconductor sector. So again, with these types of benchmarks developed, it would give rise to more opportunities for investors to properly track the Hong Kong market as well as the offshore markets in a combined way.
Jasper
That’s very exciting and interesting at the same time. Since we already started the conversation on AI, would you mind sharing with us a little bit more about how the emergence of such technology is shaping the strategy, as well as the operating and business models, for a traditional exchange like yours?
Greg
On AI, we’re noticing a lot of the “protail” — what we call “professional retail” — investing into the equities markets, particularly going through an AI or application programming interface (API) type of setup to gain access into the equities market. As an exchange, how do we provide data that is much more accessible to these AI agents, so that retail investors can invest in our markets more easily? When they do their own trading, they have all the information at their fingertips to do the allocation.
Jasper
I’m definitely going to take away with the term “protail” from you and use it in the future.
Since we’re on this topic about retail investors, tell us a little bit more about your plan for product development. For example, we observed the short-dated options contract that you have launched recently. How are you thinking about creating this ecosystem that attracts retail investors?
Greg
When you think about the overall global dynamics, retail investors have become a really strong force in the investment side, especially on exchange-listed products, whether they’re derivatives or exchange-traded products (ETPs). To develop that, you really need to look into the investor behavior so that you can look into developing the right set of tools to meet that particular type of demand. So, when we observe the overall global trend is that more of these products are shorter dated, helping the investors to do their asset allocation in a much more efficient way. With that in mind, we have developed shorter-dated options. When I look into our current market, we have a very vibrant cash equities market. But correspondingly, on the derivatives market, there are many instruments that we can create, based upon this vibrant cash equity market, to be adopted by retail investments. So short-dated options on both single stocks and indices.
On the ETP side, we have been growing significantly with the leveraged and inverse ETFs, which are now firmly a prominent product on our product shelf. But on top of that, I think it’s important to acknowledge that it’s not only just the instruments — I’m talking about basically the listed options and futures or ETPs — but in fact, as I mentioned, AI is also an important aspect in terms of catering to the retail demand. When we look at the overall full spectrum, we need to make sure that our innovation is truly adapting towards the retail user base, so that we can offer the right platform for them to do their asset allocation.
Jasper
I really like the way that you frame it and think about it. It’s really about solving the needs of the retail investors at the core. Then it drives into what kind of product ecosystem that you need to build, and technology would come together as an enabler rather than being a strategy on its own. All of these are great because it’s building on the very strong cash equity foundation that we have in Hong Kong.
Now, maybe let’s segue a little bit. Hong Kong has a very ambitious fixed income and currency (FIC) roadmap. Big plans. How are you, as HKEX, thinking about capturing this opportunity, but even more importantly, driving the market development?
Greg
Investors are looking for diversification, as I mentioned. With that in mind, it’s the diversification of geographical location as well as instruments. When you look into a single market, it needs to broaden further into the ecosystem across equities, fixed income, and commodities. If we are to develop a first-class multi-asset ecosystem for Hong Kong, we need to do all of that. Particularly on fixed income, the HKEX has a strong role to play, and, for example, in issuances. Boosting more fixed-income issuances in Hong Kong. HKEX has been priding ourselves that we are now a top leader in the IPO for the equity side. Correspondingly, on the fixed income side, we should be able to attract similar types of issuers to come to Hong Kong and do their Renminbi bond listings and subsequently drive the secondary market to a more vibrant state.
Jasper
You touch on the primary market, and then you’re about to jump into the secondary market. Now this is very interesting. As we all know, building a market is all about liquidity, and liquidity would attract more liquidity. Tell us a little bit more about your new initiatives. For example, the OTC Clear’s acceptance of Chinese government bond (CGB) as collateral and a new five-year CGB Futures contract. How are you thinking about all these new initiatives?
Greg
Currently, the Chinese government bond trading is relatively nascent in the offshore market, in comparison to its huge onshore market. That’s because there isn’t a clear price discovery of the offshore Renminbi curve. Now having the CGB futures, that instrument in itself will now allow offshore participants to do a price discovery on the five-year Chinese government bond. Now you have more observable pricing with regard to the yield curve. And with that, for issuers, whether it’s a global corporate or infrastructure bonds, there will be a basis for them to now start to issue their debt instrument.
When you do that as one of the steps that builds the ecosystem, then naturally, there should be more secondary market trading because now you have a lot more supply to meet the demand on the investment side. We’re doing all of these on a step-by-step basis. On top of that, from a liquidity perspective, we’re also doing OTC repo clearing down the road. With that, people can utilize the CGBs. If they do invest in CGBs, they can take it out and then do the repo transactions and get the liquidity. Again, that would boost secondary market trading. So overall, every single step that we do is to ensure that we are creating a vibrancy in the overall fixed income market.
Jasper
As Oliver Wyman, we have been pretty grateful that we had the opportunity to support you and your colleagues on the FIC journey. If you may, would you share a little bit of what impact you think we might have generated for your team?
Greg
We have many projects that we have worked on together. I think particularly what we're most impressed about Oliver Wyman is that you’re very patient in terms of listening, because our market is certainly unique, and you’re not giving us a one-size-fits-all solution. Going through the process of working with Oliver Wyman, we learn a lot from you, and we learn a lot about ourselves as well.
Jasper
Excellent. Thank you so much, Greg, for that. But also more importantly, sharing a lot of your very thoughtful perspectives on how the HKEX is capturing the opportunities in the market. Thank you again for participating
Greg
Thanks a lot.
This transcript has been edited for clarity.
Hong Kong’s capital markets have recovered strongly over the past two years, reinforcing its position as a superconnector between the Chinese mainland and the rest of the world. At the same time, geopolitical uncertainty, shifting interest rates, and changing investor behavior are creating new demands for diversification across markets and asset classes.
In this episode, Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX), sits down with Jasper Yip, Head of Greater China at Oliver Wyman, to discuss how these shifting global dynamics are shaping Hong Kong’s capital markets strategy. Greg shares how HKEX is responding beyond its strong equities foundation, through product innovation, which includes new technology-focused indices, short-dated options, and exchange-traded products, while using regional connectivity and AI to expand investor access and choice.
Their conversation also covers HKEX’s fixed-income and currency ambitions as part of a broader effort to build a first-class multi-asset ecosystem in Hong Kong.
INFocus Series
INFocus provides exclusive insights and trends from experts and leaders across the Asia Pacific region, exploring the forces, opportunities, and challenges shaping its future.
Jasper Yip
Welcome to INFocus. Today, with us, we have Greg Yu, Head of Markets at Hong Kong Exchanges and Clearing Limited (HKEX).
The Hong Kong capital market has recovered remarkably over the last two years, and it has retained its leadership position as the global leader for IPO venues. Yet, at the same time, we are also navigating geopolitical challenges as well as uncertainty from global interest rates. Greg, thank you so much for joining us today.
Greg Yu
Thank you very much for having me.
Jasper
Why don’t we kick it off with the global business order? We all talk about everything, ranging from geopolitical tension, higher-for-longer interest rates, to supply chain reconfiguration. Greg, let us know how you think these topics have been shaping investors' behavior globally. What does this really mean in terms of global asset allocation into China?
Greg
First of all, with the overall dynamics of the market, more and more so when we talk to investors, the top thinking is definitely on diversification. I think that’s the natural need.
From that standpoint, people are looking for more available instruments and diversity in terms of geographical area of allocation. With that in mind, from an investment or exchange standpoint, we need to develop more products, and particularly products that are geared towards China, as that is a market that nobody can ignore.
Further to that, I think historically when we think about China, a lot of concentration is towards the equity side of the investments. But I think in the coming years, there will be a lot of natural needs to diversify into fixed income, commodities, and other alternative asset classes. So, as an exchange, what we are seeing is that investors are looking for more available tools for them to do their investment allocation.
Jasper
I love the point about diversification. Particularly when it comes to instruments, I have been observing a lot of very interesting partnerships that were announced between the HKEX and other regional exchanges. For example, you have new indexes that track a mixed basket of Hong Kong and overseas underlying. Maybe you can just stay on that point and share with us a little bit more about how these new products would help and cement Hong Kong as a superconnector in your vision?
Greg
Our market is certainly growing. We’re seeing a lot more initial public offerings (IPOs) and a lot of companies listing in our market. With that in mind, we feel that the benchmarks for the Hong Kong market could extend to a wider variety, and that’s why we are firmly developing the index business.
To think about that, the first thing that we should be focusing on is what the Hong Kong market represents at the current moment. Technology is certainly a big play. That’s why in late 2025, we launched a Tech 100 index, which is an HKEX brand labeled as the first equity index. And it has hundreds of constituents that are focusing on various technology sectors such as AI, semiconductors, and so forth. That gives rise to investors coming to the Hong Kong market with a benchmark that is more focused on the technology front.
On top of that, we need to address the investment needs, because ultimately the indices are benchmarked for people for reference, especially towards the exchange-traded fund (ETF) tracking or derivatives products. What we see is that there is a huge demand coming from the Chinese mainland investors looking to invest externally in offshore markets. That’s why we are doing more of these co-branded and co-geographical location markets indices, such as the ones that we’ve recently launched with Bursa Malaysia on the large cap — 60% Hong Kong underlying and 40% of the Malaysian underlying. We’ve also done one with the Korea Exchange (KRX). On the South Korea side, again, with the Hong Kong underlying of 60% and 40% of their semiconductor sector. So again, with these types of benchmarks developed, it would give rise to more opportunities for investors to properly track the Hong Kong market as well as the offshore markets in a combined way.
Jasper
That’s very exciting and interesting at the same time. Since we already started the conversation on AI, would you mind sharing with us a little bit more about how the emergence of such technology is shaping the strategy, as well as the operating and business models, for a traditional exchange like yours?
Greg
On AI, we’re noticing a lot of the “protail” — what we call “professional retail” — investing into the equities markets, particularly going through an AI or application programming interface (API) type of setup to gain access into the equities market. As an exchange, how do we provide data that is much more accessible to these AI agents, so that retail investors can invest in our markets more easily? When they do their own trading, they have all the information at their fingertips to do the allocation.
Jasper
I’m definitely going to take away with the term “protail” from you and use it in the future.
Since we’re on this topic about retail investors, tell us a little bit more about your plan for product development. For example, we observed the short-dated options contract that you have launched recently. How are you thinking about creating this ecosystem that attracts retail investors?
Greg
When you think about the overall global dynamics, retail investors have become a really strong force in the investment side, especially on exchange-listed products, whether they’re derivatives or exchange-traded products (ETPs). To develop that, you really need to look into the investor behavior so that you can look into developing the right set of tools to meet that particular type of demand. So, when we observe the overall global trend is that more of these products are shorter dated, helping the investors to do their asset allocation in a much more efficient way. With that in mind, we have developed shorter-dated options. When I look into our current market, we have a very vibrant cash equities market. But correspondingly, on the derivatives market, there are many instruments that we can create, based upon this vibrant cash equity market, to be adopted by retail investments. So short-dated options on both single stocks and indices.
On the ETP side, we have been growing significantly with the leveraged and inverse ETFs, which are now firmly a prominent product on our product shelf. But on top of that, I think it’s important to acknowledge that it’s not only just the instruments — I’m talking about basically the listed options and futures or ETPs — but in fact, as I mentioned, AI is also an important aspect in terms of catering to the retail demand. When we look at the overall full spectrum, we need to make sure that our innovation is truly adapting towards the retail user base, so that we can offer the right platform for them to do their asset allocation.
Jasper
I really like the way that you frame it and think about it. It’s really about solving the needs of the retail investors at the core. Then it drives into what kind of product ecosystem that you need to build, and technology would come together as an enabler rather than being a strategy on its own. All of these are great because it’s building on the very strong cash equity foundation that we have in Hong Kong.
Now, maybe let’s segue a little bit. Hong Kong has a very ambitious fixed income and currency (FIC) roadmap. Big plans. How are you, as HKEX, thinking about capturing this opportunity, but even more importantly, driving the market development?
Greg
Investors are looking for diversification, as I mentioned. With that in mind, it’s the diversification of geographical location as well as instruments. When you look into a single market, it needs to broaden further into the ecosystem across equities, fixed income, and commodities. If we are to develop a first-class multi-asset ecosystem for Hong Kong, we need to do all of that. Particularly on fixed income, the HKEX has a strong role to play, and, for example, in issuances. Boosting more fixed-income issuances in Hong Kong. HKEX has been priding ourselves that we are now a top leader in the IPO for the equity side. Correspondingly, on the fixed income side, we should be able to attract similar types of issuers to come to Hong Kong and do their Renminbi bond listings and subsequently drive the secondary market to a more vibrant state.
Jasper
You touch on the primary market, and then you’re about to jump into the secondary market. Now this is very interesting. As we all know, building a market is all about liquidity, and liquidity would attract more liquidity. Tell us a little bit more about your new initiatives. For example, the OTC Clear’s acceptance of Chinese government bond (CGB) as collateral and a new five-year CGB Futures contract. How are you thinking about all these new initiatives?
Greg
Currently, the Chinese government bond trading is relatively nascent in the offshore market, in comparison to its huge onshore market. That’s because there isn’t a clear price discovery of the offshore Renminbi curve. Now having the CGB futures, that instrument in itself will now allow offshore participants to do a price discovery on the five-year Chinese government bond. Now you have more observable pricing with regard to the yield curve. And with that, for issuers, whether it’s a global corporate or infrastructure bonds, there will be a basis for them to now start to issue their debt instrument.
When you do that as one of the steps that builds the ecosystem, then naturally, there should be more secondary market trading because now you have a lot more supply to meet the demand on the investment side. We’re doing all of these on a step-by-step basis. On top of that, from a liquidity perspective, we’re also doing OTC repo clearing down the road. With that, people can utilize the CGBs. If they do invest in CGBs, they can take it out and then do the repo transactions and get the liquidity. Again, that would boost secondary market trading. So overall, every single step that we do is to ensure that we are creating a vibrancy in the overall fixed income market.
Jasper
As Oliver Wyman, we have been pretty grateful that we had the opportunity to support you and your colleagues on the FIC journey. If you may, would you share a little bit of what impact you think we might have generated for your team?
Greg
We have many projects that we have worked on together. I think particularly what we're most impressed about Oliver Wyman is that you’re very patient in terms of listening, because our market is certainly unique, and you’re not giving us a one-size-fits-all solution. Going through the process of working with Oliver Wyman, we learn a lot from you, and we learn a lot about ourselves as well.
Jasper
Excellent. Thank you so much, Greg, for that. But also more importantly, sharing a lot of your very thoughtful perspectives on how the HKEX is capturing the opportunities in the market. Thank you again for participating
Greg
Thanks a lot.
This transcript has been edited for clarity.