Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
421.9001

Speeches

Speech at the Signing Ceremony with the Dao Heng Bank for the Launch of The Hong Kong Mortgage Corporation's Mortgage Backed Securities Programme

by Joseph Yam, Deputy Chairman, The Hong Kong Mortgage Corporation Limited

22 October 1999

1. I am delighted to be present at today's signing ceremony with the Dao Heng Bank for the launch of the first batch of securities under the Hong Kong Mortgage Corporation's mortgage-backed securities programme. The launch of this programme today marks a milestone in the history of the Mortgage Corporation and in the development of Hong Kong's debt market.

2. The Hong Kong Mortgage Corporation was founded in March 1997 with a fourfold mission: to develop the secondary mortgage market; to promote banking and monetary stability; to develop the debt market; and, not least, to promote home ownership among the people of Hong Kong. During the first phase of its business development, the Mortgage Corporation has produced notable achievements in all of these fields. Under its mortgage purchase programme, launched in December 1997, the Corporation has so far purchased a total of more than $13 billion in mortgage loans: this has enabled banks to offload mortgages in order to improve their liquidity and reduce risk concentration. In 1998 and 1999 the Corporation has issued $7 billion in unsecured debts under two debt issuance programmes, making it one of the most active issuers of Hong Kong dollar fixed-rate securities. For the home-owner and prospective home-owner, the new mortgage products and initiatives launched by the Corporation have included fixed rate mortgages, introduced in March 1998, and a mortgage insurance programme, introduced in December 1998, to enable home buyers to secure mortgage loans of up to 85% of the loan-to-value ratio.

3. This rapid-paced, innovative, yet practical record of achievements, in the space of a mere two-and-a-half years, has enabled the Mortgage Corporation to serve as a stabilising force in our financial system during a period of considerable economic difficulty. I should add that, as a business, the Corporation has also made healthy profits. Today's launch marks the beginning of the second phase in its business development. The mortgage-backed securities programme represents both a new line of business for the Mortgage Corporation and an important development for Hong Kong's securitisation market. Along with a number of new securities products issued this year, it will also serve to channel, deepen and diversify our debt market and lessen our disproportionate reliance on the banking and equities markets, a process which, as I have urged elsewhere, is essential to the long-term stability of our financial system.

4. The mortgage-backed securities programme holds special attractions for participating banks, for investors, and for the Corporation itself. For the banks involved, the back-to-back structure allows them to keep a substantial portion of the cashflow from mortgages while reducing the credit risk and capital cost and substantially improving the quality of their mortgage assets. For investors, the guarantee by the Mortgage Corporation, with strong backing from the Government, provides protection from default. For the Corporation, the successful launch of this new product will be useful experience for preparing launches of more sophisticated mortgage-backed securities products in the future.

5. Dao Heng Bank's participation in the launch of today's one-billion-dollar issue makes an impressive start to the programme and sets an excellent precedent. It is the latest example in Dao Heng's strong and consistent record of support for the Mortgage Corporation's initiatives. I thank Dao Heng Bank for their participation and congratulate them on the work they are doing in developing this field.

6. Today's launch promises well for future issues of mortgage-backed securities. Looking to the future development of the programme, positive expressions of interest have already been received from a number of banks, and the Mortgage Corporation expects to close other deals in the coming few months. Among these will be a deal with American Express Bank later this year similar to the issue launched today. The aim in the Year 2000 is to issue between three and five billion dollars in mortgage-backed securities.

7. Finally, let me offer my warmest thanks to the Directors and staff of the Hong Kong Mortgage Corporation for the hard effort and imagination they have put into developing this product. It is cause for some celebration that the Corporation has been able to launch the second phase of its business development within only two-and-a-half years of its establishment - the toughest couple of years in Hong Kong's recent economic history - and I hope you will join me in congratulating Directors and staff on the latest in their growing list of achievements.

Last revision date: 1 August 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery