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22 March 2006
Research findings reveal the need for more Hong Kong finance professionals to serve the Mainland markets
Index launched for local corporates to assess and improve their readiness for the Mainland financial markets
Enjoying an impressive GDP growth rate at 9.9% per annum in 2005, China's fast-paced economic growth is expected to continue. With the country's personal savings rising to a record 14 trillion yuan at the end of 2005, the market provides enormous opportunities for provision of financial services.
As one of the leading industry professional associations for finance practitioners in Hong Kong, the Hong Kong Securities Institute (HKSI) believes that it is necessary for members and the finance community at large to be aware of our readiness for the Mainland market. Therefore, the Lingnan University (LU) was commissioned to conduct an independent market research in 2005 to examine and assess Hong Kong corporates' readiness for this important market.
Local brokerage firms plan to increase their resources committed in the Mainland by five-fold
According to the research findings, local financial firms on average plan to double their resources committed in the Mainland from HK$55m in the past two years to HK$105m in the next two years. Brokerage firms show their intention to increase their resources committed in the Mainland by five-fold.
"It is obvious that Hong Kong's economic development is closely tied to the Mainland market. The further opening up of the Mainland financial services industry in the coming years has the potential to provide stronger growth opportunities for Hong Kong based practitioners," Mr Edward Kwan, HKSI Chairman said at a press conference. According to Professor Kent Lai of LU, with the brokerage firms' plan to invest more on the Mainland, it is estimated that about 10,000 professional jobs may be created to serve the Mainland market in the next two years.
Management commitment and reputation are important for successful entry
The research comprises a mail survey and in-depth interviews, focusing on sectors of securities brokerage, fund management and insurance. A total of 138 replies out of a sample size of 1,400 were received, giving a response rate of 10%. Fourteen senior market representatives were also interviewed.
"For successful market entry, management commitment and reputation appear to be the most important factors," Professor K F Lau of LU explained. "The most important features distinguishing the 'ready' and the 'not-so-ready' firms are the establishment of special teams for Mainland operation within an organisation, and the reputation as a thought leader."
Index launched for local corporates to assess and improve their readiness
One of the key deliverables of the research project is the development of a "Mainland Market Readiness Index" (MMR Index). According to the research findings, the overall Index derived from the research is 2.79 (1 = most ready and 5 = least ready). The Index, first of its kind, intends to provide a simple-to-use vehicle for corporates to assess their readiness for the Mainland market and the areas to catch up. It is now available online at www.hksi.org/eng/survey/index.html for the general public to use.
Hong Kong talents required
The research findings also show that brokerage firms are ahead of the whole sample in that 50% of their staff in the Mainland have already obtained relevant qualifications (vs 27% for the whole sample). "The institute is keen to get our practitioners and our industry well prepared for the Mainland financial markets," says Mr Gary Cheung, Chief Executive of HKSI.
Under the CEPA agreement, Hong Kong securities practitioners are required to sit for only one examination on rules and regulations in order to qualify for the relevant Mainland industry qualification. Mr Gary Cheung adds: "Our Institute has been working closely with the Securities Association of China. In 2004 & 2005, two examination sessions were held with about 500 practitioners enrolled." The third examination will be held in Hong Kong on 13 May 2006 and interested practitioners can visit the website at www.hksi.org for information or registration.
| Enquiries: |
Mr Gary Cheung, Chief Executive on 3120 6288 or
Ms Daisy Lo, Director - Marketing and Membership Services on 3120 6158 |
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