The Hong Kong Stock Exchange (HKSE) is opening trading on Friday for the first time in its 113-year history.
Hong Kong’s stock market has suffered from heavy sell-offs this year and its stock market index, HKSE, is expected to fall further this week as investors flee the city.
The Hong Kong government has announced a series of measures to shore up its financial system, including the suspension of a controversial asset-for-value tax.
However, the announcement on Friday morning has raised concerns about how long the new rules will last, with analysts saying that investors may not be ready to make big deposits before the trading day.
“The biggest worry is that the new asset-based tax will go into effect in just a matter of hours, which will not only be a huge burden for investors but also for Hong Kong residents,” said David Kowl, a senior research fellow at the Hong Kong Institute of International Studies.
“I think this new asset valuation will be a big problem for the Hongkongers, who are already feeling the pinch from the capital market slowdown.”
The HKSE announced the move on Friday to reduce the capital gains tax rate from the current 27% to 10%.
The move was welcomed by the Hong kong government, with Finance Minister Michael Chu telling a news conference on Friday that the move would bring the tax rate down to 10% from 30%.
In an attempt to help the market recover, the government has promised to raise the capital requirements for holding shares and limit the maximum number of shares you can own, to prevent stock price falls and other market volatility.HKSE shares closed on Friday at HK$2,865.80 per share, down 6.9% from the previous session.
The HK market has also seen a surge in mainland tourists visiting Hong Kong in recent months, with a record number of people visiting the city to experience the city’s attractions and culture.