A mainland official who oversees economic affairs has revealed that a plan to set up a yuan-based stock exchange in Macau has been submitted to the central government. He Xiaojun revealed the information during his speech at a symposium, TDM Chinese Radio reported yesterday.
He said that there is hope for the stock exchange in Macau “to become the Nasdaq of the People’s Republic of China.”
The official is confident that the stock exchange will be part of the gifts offered to Macau on the Special Administrative Region’s 20th anniversary.
He is the director of the local Financial Supervision and Management Authority of Guangdong. According to mainland sources, the official has a PhD in economics from the Renmin University of China. He has spent time working and studying in Germany, Singapore, the U.S. and Hong Kong.
Following the report, the Monetary Authority of Macao (AMCM) issued a statement later yesterday clarifying that the project, set forth in the “Outline Development Plan for the Guangdong-Hong Kong-Macau Greater Bay Area,” is still “being studied.” The stock exchange will be cleared in Renminbi, according to the plan.
The financial market regulator has commissioned an international consultancy firm to conduct feasibility research. The research is progressing “in an orderly manner.”
AMCM noted that there are several mature financial centers in Macau’s neighborhood. If a city stock exchange materializes, it should understand its advantages and differentiate itself from other markets.
Once the research is in, the government will make an overall plan, combining the results and strategic plans for the Greater Bay Area.
With regards to the setting up of a stock exchange in Macau, two economists – one from the mainland and one from Hong Kong – expressed their views in an interview published in local magazine Macau Inc.
When asked about the feasibility of a stock exchange in Macau, Huang Guihai, academic at the Macau Polytechnic Institute, said, “this is quite a far-sighted plan.” He thinks Macau should research the limitations of other systems as it studies how to open its own stock exchange.
“It can make use of its late-mover advantage to establish complete and sound securities trading laws and systems, and advanced trading technology platforms to seek differentiated development compared with established stock exchanges in Hong Kong, Shanghai and Shenzhen,” Huang said.
An economist from the City University of Hong Kong, Wilson Chan, told the magazine that he does “not think that the Greater Bay Area needs another stock exchange.”
Chan thinks that Macau should have a clear vision of its stock exchange ambitions if it wants to compete within the financial markets of the Greater Bay Area.
He said that Macau “may consider setting up an equity trading center as a transitional arrangement in the first stage of developing stock market,” but added that the numbers will tell whether a market is attractive or not.
Local economist Albano Martins, a former researcher at the AMCM, shrugged off the proposal as mostly “theoretical” during an interview with Macau Daily Times in June. He said that the idea has been studied many times before, but that “there can be no securities market without proper accounting of companies.” AL