The TMA celebrates a fruitful first year and looks forward to new opportunities.
The Treasury Markets Association (TMA), of whose Council I am the Honorary President, held its first Annual General Meeting and published its Annual Report on 30 April. I wish to take this opportunity to congratulate the TMA on a very productive and successful first year. Interested readers can learn more about the TMA at its website www.tma.org.hk.
The HKMA fully supports the objectives of the TMA. The mission of the TMA is consistent with one of our goals of promoting a sound financial infrastructure in Hong Kong. Over the years, the HKMA has contributed to establishing a safe and efficient, multi-platform, multi-currency and cross-border clearing and settlement system. We are also aware that a robust financial infrastructure must be complemented by a large pool of talent and a critical mass of market participants, a wide variety of sophisticated products and services to meet the needs of corporations and investors, and market codes and standards that are in line with international best practices.
The TMA provides a platform to address these important issues. The TMA's mission would not be possible without the support and participation of the financial institutions and professionals in the treasury markets, and it is encouraging that the TMA has built up an impressive membership of more than 70 institutional and over 2,000 individual members. This broad-based support has provided the TMA with a solid foundation for initiatives to serve its members and the industry, such as the Treasury Markets Certificate and the Treasury Markets (Debt Securities) Certificate professional qualifications, as well as other training initiatives, to strengthen the knowledge and skills of the market practitioners.
The experience of the TMA also underlines the importance of public sector-private sector partnership in fostering market development. A key mandate of the TMA is to develop treasury products and services in Hong Kong to meet new market demands, especially those arising from the gradual liberalisation of the monetary and financial systems of the Mainland. In consultation with market participants, the TMA launched the renminbi non-deliverable interest rate swap in August 2006 for corporations and financial institutions that do not have access to the onshore Mainland market to better manage their renminbi interest rate exposures. Market response to this new product has been very encouraging. The market estimates that over 170 transactions, amounting to over 25 billion renminbi, have been concluded in the eight months since the swaps were introduced. This is a good example of how the TMA promotes market development and innovation.
The treasury markets in Hong Kong will continue to witness many exciting business opportunities arising from various sources. Examples include further liberalisation of offshore wealth management services offered by banks on the Mainland, issuance of renminbi bonds in Hong Kong, and developments in the investment of the Mainland's large foreign-exchange reserves. These will offer promising opportunities for the treasury markets, and the broader financial markets, in Hong Kong. Our treasury markets should also build on Hong Kong's strength and strategic location to explore new businesses or expand their presence in the region. The volatility in global markets underlines the need for innovative products to help investors to better manage their risks. The TMA can play a very useful role in developing these new products.
The TMA's Executive Board has mapped out a comprehensive and carefully thought-out programme to work closely with the industry to capitalise on these new opportunities. With the industry’s support, I am sure the TMA will continue to play an important role in helping to maintain Hong Kong's role as an international financial centre, and maintaining close contacts with counterparts in other major financial centres and on the Mainland.
Joseph Yam
31 May 2007
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