Title: Decrease in Turnover Prompts Calls for Reduction of Stamp Duty on Hong Kong Stocks
Date: [Insert Date]
By: [Insert Reporter Name]
In the first half of this year, the average daily turnover of the Hong Kong stock market experienced a significant decrease of 16%, according to the semi-annual report released by the Hong Kong Stock Exchange. This decline has sparked widespread calls from market participants for the reduction or exemption of stamp duty on stocks in order to restore liquidity and attract more investors to the regional market.
The Hong Kong Securities and Futures Professionals Association, in a public document issued on August 9, strongly recommends the revocation of stock stamp duty to enhance the attractiveness of Hong Kong stocks.
During a recent semi-annual media briefing held on August 16, Ou Guansheng, a spokesperson for the Hong Kong Stock Exchange, addressed questions regarding the possibility of reducing stamp duty on stocks in the future. Ou acknowledged that the previous increase in stock stamp duty had resulted in increased tax revenue for the Hong Kong SAR government, which was seen as a measure to generate additional funds during the ongoing period of epidemic prevention and control. However, the decision to reduce stamp duty ultimately lies with the Hong Kong SAR government.
While Ou emphasized the continued efforts of the Hong Kong Stock Exchange to ensure a thriving market and enhance the competitiveness and attractiveness of Hong Kong stocks through various infrastructural developments, he stated that lowering stamp duty was not within their purview.
One of the primary concerns raised by market experts is the notable disparity in transaction stamp duty rates between Hong Kong stocks, A-share markets, and the US stock market. The higher stamp duty in Hong Kong is believed to contribute to capital outflows from Hong Kong stocks, redirecting investments towards lower-cost markets such as US stocks and A-shares. This has led to a lack of liquidity and trading depth in Hong Kong stocks.
Yan Zhaojun, a strategic analyst at Zhongtai International, highlighted that reducing or revoking stamp duty could potentially increase high-frequency trading, attract quantitative funds back to the market, improve liquidity and market depth, and ultimately stimulate the capital market in Hong Kong.
It remains to be seen whether the Hong Kong SAR government will heed the calls to reduce stamp duty on stocks. The decision has significant implications for the future of the regional market and its ability to regain investors’ confidence.
(Source: Shanghai Securities News China Securities Network)
Article source: Shanghai Securities News China Securities Network
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