HKEx Group Strategic Plan

Transcription

1 HKEx Annual Media Luncheon HKEx Group Strategic Plan January 2013

2 2 Agenda 1 HKEx in Retrospect 2 HKEx Group Strategic Plan Conclusion

3 3 Strategic Plan : Vision & Mission Then Vision To position HKEx as the China exchange of choice for our global investors and issuers and the international exchange of choice for our Greater China issuers and investors Mission To create and operate active international public financial markets in Hong Kong

4 A Fund Raising Story Tremendous Growth of Market Cap , Total Funds Raised (HK$ bn) Market Cap of HKEx Markets (HK$ trn) ADT Driven Growth for HKEx HKEx: A Global Leader Why China? The Opening of China Has Positioned HKEx on a Path from a Regional Player to a True Global Leader ADT (HK$ bn) HKEx (388) Market Cap (HK$ bn) Non-China China 4

5 Why Have We Succeeded? Because We Have Provided China with the Right Value Proposition at the Right Time 5 China International CHAPTER 1 Issuers Equity Investors Issuers with China Nexus CHAPTER 2 Investors Issuers RMB CHAPTER 3 Financial Players and Corporates Fixed Income & Currencies Financial Players and Corporates Commodities LME Key Difference: Chapter 1 Money inflow to China (Capital Import) Chapter 2 & 3 Money flows out of China (Capital Export)

6 Strategic Plan : What Have We Achieved? 6 Key Themes Milestone Achieved Tasks to Be Considered Over Time Grow the Core Business No. 1 IPO in International Listings Streamline Listing Process No. 1 in Structured Products Turnover Growth in Stock Options Position Limit Enhance Global Competitiveness AMS/3.8 TKO Data Centre Launch Orion Platform Hosting Services New Trading Hours T+2 Finality After-hours Futures Trading Further Market Micro Structure Reform Next Gen Systems Risk Management Reform Asset Class & Geographic Expansion RMB Infrastructure RMB Products (IPOs, Equity Add-on s, ETFs, Futures) Acquisition of the LME Market Data WOFE CESC (1) JV OTC Clearing BRICS Alliance Mutual Market Access with Mainland SP laid the foundation for transformation under SP Note: CESC China Exchanges Services Co. Ltd.

7 7 How Does the Past Lead to the Future? Raising Capital Commercialisation of SOEs and Improved Governance Rapid Growth Private Enterprise Growth International Listings Slowing Growth/ Restructuring Capital Import Internationalisation of RMB Commodity Market Opens Up Capital Export Cash Equity Exchange Rate/Interest Rate Reform Internationalisation of China Capital Markets Derivatives Diversification of Domestic Investors

8 8 Past Glory to Future New Horizons Foundation of Success Primary listing of SOEs and private companies HKEx demutualisation Consolidated HKEx overall trading and clearing infrastructure Transitioned & Positioned for Global Leadership Consolidated the core business Enhanced global competitiveness Secured the future To New Horizons

9 Strategic Plan

10 10 Group Strategic Vision and Mission for Vision To build HKEx into a leading global vertically-integrated multi-asset class exchange and prepare ourselves for the managed but accelerating opening of China s capital account Mission Aim to be the Global Exchange of Choice for our China clients and our international clients seeking China exposure

11 HKEx Strategic Plan Leverage China s Capital Account Opening and Aim for Global Leadership 11 Business Strategy Horizontal integration multi asset classes Cash Equity Equity Derivatives Fixed Income and Currency Commodities Vertical integration Products Trading Clearing Platform & Infrastructure Strategy Consolidate Connect Modernise Strategic Focus : Mutual Market Access with China + Global Leadership

12 Leverage LME as a Catalyst to Facilitate an an Accelerated Capital Capital Account Opening: Explore the Right Model 12 Domestic investor s strong need to diversify Desire internationalisation Equity RMB 31trn Already open Need offshore investment products FIC RMB 258trn Strong user demand for greater integration Risk management needs of the real economy Project China to global pricing power Commodities RMB 95trn New Outflow of RMB Structural Growth Structural Growth Organic Growth Trade Structural Growth Trade Organic Growth $30 Equity trillion $30 HK$13trn trillion Risk Management $30 FIC trillion (1) RMB 571bn Risk Management $30 LME trillion US$14trn $30 trillion (2) Explore the right model Note: (1) FIC HK refers to RMB deposit offshore as of Nov (2) 2012 figure (up to 6 December 2012) Will benefit from natural outflow of RMB Explore the right model

13 Global Leadership: Horizontal Asset Classes + Full Vertical Integration Business Strategy 13 Across Asset Classes Global Leadership China Connectivity Clearing Trading Cash Equity Equity Deriv. FIC Commodities Vertical Value Chain Products Regional Player Cash Derivatives

14 Cash Equity Mature Business with Potential Structural Uplift from Mainland s Opening Up Business Strategy 14 Clearing Scripless IOSCO compliance Cross-border clearing infrastructure through partnership with Mainland FLOAT Trading Expand RMB trading Microstructure reform Mutual market access via partnership with Mainland counterparties ETF Products Continued China listings B share to H share conversion Easing of offshore listings by Mainland regulator International listings RQFII ETFs and cross-market ETFs VELOCITY through partnership with Mainland counterparties for mutual market access programme

15 Equity Derivatives One-stop Shop for Chinese Investors Business Strategy 15 Clearing Potential OTC Clearing of equity derivatives Unification of Clearing Houses CHINA Trading After-hours futures trading Stock options revamp / position limits GLOBAL Products New products based on indices developed by Mainland JV (CESC) BRICS Alliance Phase II Maintain significant advantage through product innovation

16 16 Fixed Income and Currency Leveraging RMB Internationalisation Business Strategy Clearing OTC Clearing IRS/NDS NDFs Other local and regional products Founding members programme in progress ON- EXCHANGE Trading Leverage HKFE platform and membership base Products RMB derivatives product suite Broader range of RMB currency futures Bond index RQFII ETFs on bonds OTC RMB internationalisation and new development in global regulations as key drivers

17 17 Commodities LME Allows Us to Leapfrog into This Asset Class Business Strategy Commercialisation Clearing Self Clear Asia time zone clearing OTC clearing Mainland connectivity CORE Trading Asia time zone price discovery Electronic trading Trade Repository Attract Asian participants On-shore warehouses Mutual market access via partnership with Mainland EXTENSION Base metals Other commodities Products RMB commodities products Commodities index Agriculture Energy EXPANSION Other metals Soft Significantly increases Hong Kong s relevance to China

18 Strategic Plan Platform and Infrastructure Strategy Platform & Infrastructure Strategy 18 Today Future Platform Strategy Market Specific Platforms Next Generation Foundation Common Platforms Infrastructure Strategy Consolidation Access Connectivity

19 Platform Strategy Transitioning to Cross-Asset Common Platforms Platform & Infrastructure Strategy 19 Today Future Market Specific Platforms Next Generation Foundation Common Platforms Cash Derivatives Cash Derivatives Equity Equity Derivatives Fixed Income & Currency Commodities Commodities Build the Next Generation Trading System for Cash Equities Equity Equity Fixed Income & Currency Trading Market Data Clearing Extend Orion Market Data System to cover FIC and Commodities Feasibility study on Next Generation Clearing System Note: Conceptual illustration only. Existing platforms Next Generation platforms Vertical silos from historical legacy Vendor dependent support Seed best of breed technology in certain asset classes Prepare for extending the platform to other asset classes Cross-asset class platforms Fewer vendors Horizontal deployment synergy In-house support capability

20 Infrastructure Strategy Platform & Infrastructure Strategy 20 Today Future Consolidation Access Connectivity TKO Data Centre Hosting Services Mainland Market Data Hub Mainland WOFE set up Distribution of Market Data to Mainland via data hub Consolidate IT offices and multiple data centres operational efficiency achieved Cash system migrated in Oct 2012 Foundation for Next Gen platforms Lower latency & ecosystem Launched in Dec 2012 Central Gateway EP EP EP SDNet Central Gateway Trading System Lower costs for market LME Point of Presence in HK Facilitate Asian participants access to LME Global Networks Increase exposure to overseas participants Attract global network into our ecosystem so that we can receive increased overseas liquidity

21 Conclusion 21

22 Preliminary Timeline It is a Plan; It will Take Time; Timing will be Uncertain Beyond B H CESC product launch Equity After-hours trading Mutual market access/ trading-clearing link Further market microstructure reform Scripless OTC Clear launch FIC Further RMB benchmark products Prepare for uptick of RMB outflow resulting from mutual market access Complete initial integration Explore partnership opportunities with China commodity exchanges Commodities Asia time zone benchmark Prepare HK-based commodity trading & clearing infrastructure Enhance cooperation in warehouse and cross-border trading facilitation Launch Asia time zone commodity products Launch LME Clear Full commercialisation of LME

23 23 Conclusion on Strategic Plan Strategic Vision: To build HKEx into a leading global vertically-integrated multi-asset class exchange Foundation: Continuing growth of HKEx s core business Opportunity: Managed but accelerating opening of China s capital account Key Catalyst: The acquisition of the LME Mutual Market Access + Global Leadership

24 24 HKEx Group Organisation Structure Internal Audit Company Secretary BOARD Chief Executive Charles Li Martin Abbott Bryan Chan Bill Chow Mark Dickens David Graham Gerald Greiner Management Committee (In Alphabetical Order) Henry Ingrouille Romnesh Lamba Richard Leung Charles Li (Chairman) Diarmuid O Hegarty Calvin Tai Listing and Regulatory Affairs Global Markets Global Clearing Information Technology Corporate Services Finance Chief Regulatory Officer David Graham Co-heads of Global Markets Martin Abbott/Romnesh Lamba Head of Global Clearing Gerald Greiner Co-heads of IT Bill Chow (Chief Technology Officer)/ Richard Leung Chief Operating Officer Henry Ingrouille Chief Communications Officer Henry Law Chief Financial Officer Listing Division Legal Services Equities & FIC Bryan Chan/Calvin Tai (1) Commodities Cash Clearing Risk Management (3) Felix Wang/ Ketan Patel/ Chris Jones Cash Trading System Development & Support Derivatives System Development & Support Chief Administrative Officer Monica Wong Advisory Services Financial Control Market Surveillance Secretarial Services Cash Trading Derivatives Trading LME Futures Clearing OTC Clearing Clearing System Development & Support IT Infrastructure & Operations Human Resources Treasury Chinese Wall Market Data Product & Index Development Asia Commodities Stock Options Clearing LME Clear Corporate and Hosting Operation Systems Development & Support Market Data System Development & Support Corporate & Investor Communications Corporate Finance CESC (2) Issuer & Client Services Mainland Development Clearing Business Development Listing Systems, E-Business & OA Quality Assurance & Security Management Research & Policy Business Development & Strategy Platform Development Hosting Services Facilities Management Note: (1) Bryan Chan is principally responsible for Cash Trading, Market Data and CESC; Calvin Tai principally oversees Derivatives Trading and Product & Index Development; they jointly supervise Issuer & Client Services (2) CESC: China Exchanges Services Company Limited (3) Co-heads of Clearing Risk Management will report to HKEx s Chief Executive directly on material risk matters Enterprise Risk Management & Information Security

25 25 LME Current Organisation Structure Chief Executive of LME Martin Abbott Deputy Chief Executive Diarmuid O Hegarty Compliance & Regulation Education & Marketing Business Development Human Resource Finance & Secretarial & Facilities Market Operations Physical Operations Systems & IT Post Trade Asia