Hong Kong Financial Secretary said here Wednesday that Hong Kong is to enhance position as international financial center by improving financial regulatory system, promoting bond market and reinforcing Renminbi business.

He made the remarks while presenting the 2005-2006 Government Budget to the Legislative Council Wednesday.

Tang said Hong Kong now ranked first in Asia and third in the world last year in terms of capital raised, with total Initial Public Offering (IPO) and post-IPO equity funds reaching some 265 billion HK dollars (33.97 billion US dollars), out-performing the London and Tokyo Stock Exchanges.

He said market capitalization also hit a new high of about 6,650 billion HK dollars, nearly 50 percent above the level before Hong Kong's returned to the motherland over seven years ago.

In Hong Kong, Chinese mainland enterprises have raised over 900 billion HK dollars since the introduction of H-shares in 1993. As at the end of last year, a total of 304 Chinese mainland enterprises had listed here, 22 percent more than in 2003 and representing over a quarter of the total number of listed companies in Hong Kong.

Tang said, as an international financial center, one of Hong Kong's major tasks is to provide an effective, transparent and fair regulatory regime on a par with international standards.

He said Hong Kong will introduce a bill into the Legislative Council next month to implement the new capital adequacy standards for banks issued by the Basel Committee on Banking Supervision, commonly known as Basel II. These new standards will strengthen the risk-management capability and stability of Hong Kong banking sector.

Tang added that Hong Kong will also continue to promote its bond market. The government launched in 2004 its 20 billion HK dollars global bond offering and it will consider whether to issue additional bonds in future, having regard to Hong Kong's objective of promoting the local bond market and the financial position of the government.

He said last year, Hong Kong became the first place outside the Chinese mainland to conduct personal Renminbi (RMB) business, including deposit-taking, currency exchange, remittances and credit cards.

At present, a total of 38 Hong Kong retail banks, nearly all of them, provide the first three of these services. As at the end of January this year, total RMB deposits in Hong Kong exceeded 13.1 billion yuan (1.56 billion US dollars).

For the further development of RMB business in Hong Kong, Hong Kong will explore the diversification of the RMB assets and liabilities of Hong Kong banks, explore the provision of appropriate RMB banking services for trade and other current account transactions between Hong Kong and the Chinese mainland and explore the feasibility of establishing a RMB debt issuance mechanism in Hong Kong.

Editor: Olivia