The Hong Kong Stock Exchange released market statistics for 2021, among which the total turnover of the securities market reached a new record high, with the total turnover of the year reaching HK$41.18 trillion, an increase of 28.25% from the HK$32.11 trillion in 2020.
However, in terms of the IPO market, the number of newly listed companies listed on the Main Board and GEM in Hong Kong in 2021 is only 98, down 36.36% from 154 in 2020, and the total amount of IPO funds raised has also dropped from a high of HK$400.137 billion to HK$328.851 billion.
Financial Secretary Chen Maobo announced in the Budget last February to raise the stock stamp duty rate to 0.13% for both buyers and sellers based on the transaction amount. Some opinions, mainly in the financial sector, claimed that this move would lead to a sharp drop in the trading volume of Hong Kong stocks. Zhang Huafeng, a member of the service sector, described it as "killing the chicken to get the egg".
By June, the Income (Stamp Duty) Bill 2021 will be passed by the Legislative Council, which will increase the stock stamp duty rate from 1 August.
Mr. Zhang Huafeng, a member of the financial services industry, criticized the increase of stock stamp duty as a mistake.
(Photo by Lu Yiming)
The argument of tax hike and transaction volume reduction is self-defeating
However, after the past six months, market data from the Hong Kong Stock Exchange indicated that the industry's remarks at that time seemed to be alarmist.
Not only has the transaction volume increased in 2021, but even if the main board market data for the five months after August is independently calculated, the total transaction value has also increased from HK$14.09 trillion in the same period of 2020 to HK$14.52 trillion, and even the general expectation is even higher. The number of deals affected by major opportunities also increased from 209 million to 224 million.
A rough estimate of the financial revenue of stock stamp duty brought to the SAR government in the past five months has reached at least about HK$37.753 billion, which is HK$8.712 billion more than the old tax rate, and is 9.565 billion higher than the tax generated by transactions in the same period in 2020. Hong Kong dollar.
Since neither the transaction amount nor the number of transactions has dropped significantly, and the government's stock stamp duty income can rise again, the argument that tax hikes will reduce transactions is naturally self-defeating.
Attract new shares to raise funds to increase treasury income
At the same time, the Hong Kong stock market did not perform as well in the second half of last year, that is, attracting newly listed companies to raise funds in Hong Kong.
Looking only at the number of new shares on the main board, there are 81 and 65 in the first seven months of 2020 and 2021, respectively, and 65 and 32 in the next five months. The former has decreased by less than 20%, while the latter has decreased by more than half.
However, this phenomenon of hot and cold afterward has little to do with the increase in stamp duty or other factors in Hong Kong. The bigger impact should come from the tightening of supervision in the Mainland.
As the Hong Kong Stock Exchange began to optimize the secondary listing system for overseas issuers and implement the "Special Purpose Acquisition Company (SPAC)" listing mechanism at the beginning of this year, it is believed that it will help encourage more Chinese concept stocks to return and star companies to continue listing in Hong Kong.
In addition, the Financial Secretary Chen Maobo recently said that he will cooperate with the mainland authorities to consider expanding the depth and breadth of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs. If the scope includes "new" business, it will be more conducive to attracting new stocks, and it will also help in the long run. Increase local trading volume and related taxes.
The accounting firm KPMG predicts that in 2021, the Hong Kong Stock Exchange will drop out of the top three in the global ranking of IPO fundraising, ranking fourth.
(VCG)
In any case, the adjustment of stock stamp duty and changes in stock market trading volume last year have already reflected that fiscal revenue and market sentiment can complement each other, and the relationship between the two is a non-zero-sum game.
As long as financial officials and authorities can do their part to revitalize the financial market, they also try to help increase the tax revenue of the treasury, so that they can earn resources for other government departments to develop the social economy and improve people's lives. There is no need to overly taboo the biased opinions of certain vested interests in work.
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