【Iran Crisis】Treasury Secretary Xu Zhengyu: Continually monitoring the situation, implementing different measures to maintain market stability, market reform faces challenges

Treasury Secretary and Commissioner of the Treasury, Matthew Cheung Kin-chung, stated that the Middle East is of significant importance in energy exports, and the Hong Kong government will continue to monitor the situation. Global uncertainties are increasing, and the stock market, as a “thermometer,” will inevitably reflect these conditions. He emphasized that the government will do what is necessary and introduce various measures to maintain market stability.

He believes that in the medium to long term, the geopolitical situation highlights Hong Kong’s role as a safe haven, turning it into an advantage amid major changes. The Treasury Department will continue to strengthen related efforts.

Reforms are being implemented one after another, facing challenges head-on

The Hong Kong Stock Exchange’s consultation period on optimizing the lot size for Hong Kong stocks has been extended to next week. He reiterated that the purpose of the reforms is to facilitate investor participation. The market’s response has been positive, and future reforms will be rolled out gradually as they mature. He admitted that many of the current government’s reforms are about facing difficulties directly. Any reform will inevitably encounter differing opinions, and the authorities will do their best to clarify the goals of the reforms.

More than 10 local and international banks have joined the Hong Kong Gold Settlement Company Board of Directors

In January this year, the Treasury Department signed a cooperation agreement with the Shanghai Gold Exchange, and the Hong Kong government fully owns the Hong Kong Precious Metals Central Settlement System Limited (referred to as Hong Kong Gold Settlement Company). Treasury Secretary Matthew Cheung Kin-chung stated that the department has extensively invited industry professionals to serve as directors, and more than 10 local and international banks have joined the board so far.

He mentioned during a Hong Kong radio program that after the system is established, banks will act as clearing members. Therefore, they need to consult the market and participants on clearing rules to ensure they understand how the system operates.

Interconnection with Shanghai Gold Exchange is not a simple issue

When asked about interconnection with the Shanghai Gold Exchange, allowing Shanghai gold to be settled in Hong Kong, Cheung Kin-chung said this is not a simple matter. He emphasized that it is not a matter of unwillingness but that the designated warehouses for Shanghai Gold are already established in Hong Kong for settling international trading contracts.

He pointed out that any interconnection, under mutually beneficial circumstances, is welcomed by the government because Hong Kong’s advantage lies in collaborating with overseas and domestic exchanges. However, commodities are fundamentally different from stocks. In building a gold ecosystem, storage as the foundational infrastructure is key, with a goal of surpassing 2,000 tons of gold storage within three years.

Financial Hot Talk

Middle East conflict threatens oil supply—Will oil prices break $100? Could this impact the global economy?