Good afternoon, ladies and gentlemen. Welcome to HKEX 2022 Annual Results analyst presentation. Today, we are very pleased to have our Chief Executive Officer, Mr. Nicolas Aguzin, and our Group CFO, Ms. Vanessa Lau. Gucho and Vanessa will first give a presentation about our business and strategy. We are happy to take some of your questions. Without further ado, over to you, Gucho.
Thank you, Ricky. Good afternoon, and thank you for joining us today. Today, on behalf of HKEX, I'm delighted to be presenting to you, investors and analysts here in Hong Kong and around the world, our financial results for the full year 2022. 2022 was a year of good strategic progress for HKEX, a year in which we delivered and announced a range of important key initiatives. It was also a very challenging period for global markets. The macroeconomic and geopolitical backdrop created significant tailwinds all around the world. I am pleased to report our business and our markets continued to demonstrate resiliency. Today, we're reporting the best fourth quarter HKEX has ever had, as well as solid full-year results. We also made considerable strategic progress in elevating our value proposition as an East-West Super connector.
In particular, this has been a defining year for our world-renowned Connect franchise. Just in this year, we made and announced more enhancements to our Connect program than in the 8 years since Stock Connect launched. Some of these are potentially game-changing enhancements that will redefine regional markets for years to come. Despite the challenging backdrop in 2022, our results reflects the efforts we have made over the last couple of years to diversify our business. This has meant that the softness in global cash markets was, at least in part, mitigated by the strong performance in other areas of our business. In particular, we saw exceptionally strong performance in the Hong Kong derivatives, fixed income, and ETF markets. Each of those sectors had record years and reported all-time high results. As we all know, this was a difficult year for fundraising in global equity markets.
Notwithstanding this, Hong Kong and HKEX remained one of the top fundraising venues in the world. In the second half of the year, we were pleased to see more positive sentiment return to the IPO market, with more than four times the level of fundraising compared with the first six months of the year. Throughout the year, we were also pleased to continue enhancing our market microstructure and product ecosystem to make sure our markets and business remain both competitive and attractive. These are just some of the highlights of the year. I will discuss some of them in more detail shortly. First, let me hand over to Vanessa to go through the full year results in more detail.
Thank you, Gucho. Good afternoon, everyone. Thank you for joining us today. I am Vanessa Lau, and would now like to share with you our 2022 financial results. 2022 was a challenging year around the world, with weak macroeconomic sentiment and a fragile geopolitical backdrop. However, our results continued to reflect the resiliency and robustness of our markets and business. Despite headline ADT being down 25% versus the strong prior year, core business revenue for 2022 was only 9% lower than the record 2021, reflecting the ongoing successful diversification of the group's business in recent years. Our External Portfolio made a loss, affected by the broader performance of global financial markets. For the full year, total revenue and other income was down 12% against 2021.
Profit after tax, earnings per share, and dividend per share declined by 20% from the record highs in 2021, with profit after tax at $10.1 billion, earnings per share at $7.96, and dividend per share at $7.14. The derivatives market performed very well throughout the year, with the number of derivatives contracts traded on the Hong Kong Futures Exchange reaching a record high in 2022. This strong performance reflected both the increased risk management needs of our clients in a volatile market and the increased popularity for our newly launched derivatives products, including the Hang Seng TECH Index Futures, the Hang Seng Suite options on futures, and the MSCI China A 50 Connect Index Futures. The IPO market saw some encouraging momentum in the second half, with the pipeline remaining robust as we move into 2023.
Looking at the fourth quarter, which was very good for HKEX, we are today reporting record fourth quarter revenue and profits. Headline ADT was up 30% against Q3_2022 to $127 billion. Core business revenue was 10% higher than Q3. Coupled with higher investment income on our corporate funds, Q4 total revenue and other income was $5.2 billion, up by 20%. Profit after tax was $3 billion, up 32%, and earnings per share was $2.35, up 31% quarter-on-quarter. Turning to the next page, where we focus on the detailed financials for the full year. Our core business revenue was impacted by the decline in headline ADT and Stock Connect Northbound trading volume, the lower depository fees from fewer EIPO applications, and lower listing fees from newly listed derivative warrants and CBBCs.
This was partly offset by higher trading fees from the record volumes on the derivatives market and higher net investment income from margin funds. The External Portfolio incurred fair value losses of $486 million in 2022 compared to gains of $364 million in 2021. Total revenue and other income declined by 12% against the record 2021. OpEx was up by 12%, reflecting our continuous investment in talent, infrastructure, operational excellence, and the professional fees incurred for the LME nickel incident. We move to the quarter-on-quarter comparison. Market sentiment improved in Q4. Headline ADT was up 30% against Q3, and the number of contracts traded on the Hong Kong Futures Exchange reached record quarterly high in Q4.
Core business revenue was up 10% against Q3, attributable to an increase in trading and clearing fees and an increase in investment income from margin funds. The External Portfolio also rebounded and recorded fair value gains of HKD 173 million in Q4 compared with losses of HKD 148 million in Q3. As a result, total revenue and other income was up 20% and profit after tax was up 32% compared with Q3. Moving on to look at the trend line. We continue to follow the general upward trend of the last 5 years for both revenue and profit, with 2022 results consistent with long-term trend levels after the exceptionally buoyant volumes in Q1 2021.
Despite the weaker market sentiment in 2022, HKEX continues to maintain an attractive EBITDA margin, reflecting the active work we have undertaken to diversify our business in the past years and to manage costs while continuing to invest. Next, we take a look at our investment income. Net investment income comprises of internally managed corporate funds, margin, and clearing house funds, and an actively managed external portfolio. Total net investment income in 2022 was HKD 1.36 billion, up 4% from the prior year. Our internally managed investment income more than doubled, benefiting from rising interest rates. However, the increase was mostly offset by the mark-to-market losses of HKD 486 million on the External Portfolio in 2022.
In the second half of 2022, a $2 billion redemption from the External Portfolio was completed, reducing the immediate and long-term impact of market volatility on HKEX's earnings. Although the Hong Kong dollar HIBOR has moderated after Q4 2022, we expect the high interest rate environment to continue for much of 2023, which should boost our internally managed investment income. Lastly, let's take a look at our operating expenses. OpEx was up 12% in 2022 compared with 2021. Excluding HKEX Foundation charitable donations, which are funded by foundation donation income and excluding other exceptional expense items, OpEx increased by 9%, reflecting our continued investments in existing and new talent, infrastructure, the customer, and operational excellence. To summarize, despite a challenging year globally, our core business continues to show its strength and resilience built upon solid foundations.
We have a clear vision and strategy and a talented team to execute. As we look forward to the rest of 2023, we are pleased to see that there has been a definite improvement in market sentiment, driven by a relaxation in global monetary and fiscal tightening and mainland China's stated commitment to continued opening up post the zero-COVID policy. Some uncertainties persist. Inflationary pressures, geopolitical tensions, and the risk of global economic recession, which could impact market sentiment and therefore the returns on our external portfolio. Notwithstanding this, we remain resolute in the strong execution of our strategy, ensuring prudent cost management while building our business and firmly focused on successfully shaping our market for the long term. With that, I'll hand back to Gucho for our business and strategic update.
Thank you, Vanessa. As I mentioned earlier, our business demonstrated very good resiliency throughout the year against a backdrop that was turbulent and challenging at times. I also mentioned that diversification and a range of new initiatives continued to ensure that we delivered on our vision and strategy. One such example was the inclusion of ETFs in Stock Connect. This really opened up a whole new asset class and a whole range of possibilities to investors in Hong Kong, Mainland, and internationally. The reforms that we made to our listing regime in 2018 made Hong Kong a leading venue for the companies of tomorrow, and we continue to see the results of this. In 2022, 65% of our funds raised came from new economy and biotech sectors.
Our IPO pipeline remains robust. We're optimistic that this will be a constructive year as it relates to new fundraisings. Let's take a look at our derivatives market. In 2022, we successfully strengthened our position as Asia's premier derivatives hub. There was greater demand for the new derivative contracts introduced by HKEX over the last year. There was increased hedging needs to counter market volatility. Both of these factors are reflected in this strong performance. We saw trading records set across a number of individual derivatives products. I'll give a few examples. The number of contracts traded on the futures exchange reached a record high with volumes up 33% year-on-year. We also continued to see robust volumes across our China-related suite of products with new trading volumes observed in our US dollar CNH futures.
The newer contracts that were launched over the past two years also gained significant traction. For example, the Hang Seng TECH Index Futures and our suite of Hang Seng options and futures achieved 5 and 6-fold year-on-year increases in volumes respectively. Now let's look at our exchange-traded products or ETPs in a bit more depth. The market's appetite for ETFs has continued to grow throughout the year with HKEX seeing record volumes and a whole range of new products joining the ETF ecosystem, including many firsts, and you can see those in the slide here. During this period, we also launched a range of initiatives that have continued to enhance our ETP market structure and elevate its competitiveness. Now let me focus more specifically on the progress we made executing against our three strategic imperatives.
Our first is connecting China and the world. By that we mean leveraging our China advantage. I am certain the wide range of initiatives that were launched or announced during 2022 will help forge even greater connectivity across our markets. They also carry significant implications for Hong Kong as an international financial center. Our second imperative is connecting capital with opportunities, which refers to improving our market liquidity and enhancing our ecosystem. Under this imperative, we saw good progress in developing the depth, vibrancy, and diversity of our markets. To do this, we need to continue expanding our client base, introducing new products, and enhancing our market efficiency. We were pleased to announce the opening of our New York office, which will allow us to be much closer to many of our international clients and partners.
We also made a number of enhancements to our listing regime and market structure, which will be important to continue improving the competitiveness of our markets. Our third strategic imperative, which is connecting today with tomorrow, by which we mean how we prepare our organization for the future. In executing this strategy in 2022, we focused on future-proofing HKEX by organizing our business around four core platforms, which will allow us to capitalize on mega-trend opportunities while modernizing our operations. We were especially proud to have launched Core Climate, a Hong Kong-based international carbon trading platform that connects capital with climate-related products and opportunities in Hong Kong, the region, and beyond. Looking ahead, we expect many of the macro challenges of 2022 to persist in 2023. I want to stress that we do not think that the medium to long-term opportunities are diminishing.
We think they remain significant. China post-COVID opening and continuing relevance and importance to of Asia to the global economy provide us with renewed optimism. The fundamentals of our unique offering remains unchanged. As we move forward, we will look to create more of the building blocks that will underpin our growth and developments. We will leverage the enhancements we've announced to our mutual market connectivity. In doing so, deepen our role as the super connector between China and the world. We will continue to seek to increase the attractiveness and competitiveness of our markets by enhancing our listing regime and expanding our product ecosystem. This will create more opportunities and more liquidity for our customers. We will continue to invest in talent, technology, in our clients, and in building operational excellence, the foundational building blocks of any great business.
We will build on our international reach, creating relationships, winning new clients, and driving our connectivity and the connectivity of Hong Kong. We have a great team at HKEX, a clear strategy, and we're set for a busy year. We have achieved a lot in the last year in building a strong platform for the future. Our global reputation and strong financial position places us in an outstanding place to capture the opportunities ahead. I am sure many of you heard the Financial Secretary put Hong Kong as an IFC front and center in his budget speech yesterday. We're very proud to be part of that ecosystem, and we're committed to working with all our stakeholders in Hong Kong to champion this great city as a very relevant, important global international financial center.
To conclude, if I have to recap 2022 for HKEX, I would highlight three things. First, China. We made more enhancements to our connectivity to mainland China's markets in 2022 than in any other year previously. Second, the world. We were out there connecting, forging new relationships, and expanding our global footprint and product ecosystem. This is so important for Hong Kong and its future. Finally, of course, Hong Kong, right here, we have made our business stronger and better to connect with China and internationally. We're very well-positioned for, like, the opportunities ahead. With that, thank you very much, and I'm happy to take your questions.
Thank you, Gucho and Vanessa Lau, for your sharing. Now we will open for some questions. Operator, could you please give the audience the instruction how to ask questions either via webcast or audio? Thank you.
Thank you. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Gary Lam with HSBC. Please go ahead.
Hello. Thank you very much, Gucho, Vanessa, and Ricky. Two strategic question and maybe one small financial question, if I may. Firstly, if memory serves me right, Gucho, you might have visited Middle East at least two times over the last six months. Could you talk us through the opportunities that you are seeing there? Our understanding is that if you're a large sort of oil company, probably you don't need excess cash. Where do you see that as a key need from the other side of, you know, the Middle East market? Shall we focus more on from an issuer perspective, like a secondary listing or dual primary, or shall we be thinking about the broader sort of commodity linked or sort of, exchange to exchange linkage? That's one.
Secondly, you referred to the Financial Secretary who effectively hinted that the consultation for the Specialist Technology listing regime change is going to be implemented in the next coming 5 weeks. Can we understand the expected implication here, the timing of events, as in, will there be companies already under discussions to follow this new regime? Would it, for example, affect not only fresh new issuers but also the conversion from secondary listed companies into primary listing? Lastly, maybe a smaller financial question. I noticed the effective tax rate declined quite noticeably year-on-year as well as particularly on Q4 2022 . Would be great to have Vanessa comment, you know, whether it's a sustainable situation or whether they are some one-offs. Thank you.
Thank you, Gary, for your question. Let me start with the Middle East trip. Yes, I was there actually, three times, and although one was to watch a soccer event, that ended up being a very good soccer event. But anyhow, I was in many, many cities around the Middle East, both in October and then later, with the Hong Kong delegation just a couple of weeks ago. The interesting thing about the Middle East is that there's so many funds and you probably have been all observing this in the sense that when we look just at the sovereign wealth funds, if you look at the top 10 sovereign wealth funds of the Middle East, they add up to about close to $4 trillion in assets under management.
That's just, like, the top four. They have somewhere between 1%-2% invested in, in China, a really very small amount, and 1%-2% is some of the bigger ones. I mean, the others are, like, almost nothing. Many of them have expressed to us their interest in increasing that percentage to something around 10% or even north of 10% in some cases. On top of that, they're growing at a very high pace, both for the returns that they're obtaining, and then there's additional funding included in there because that's their way of providing diversification.
When you look at that and you think that they want to go from only around 1% today to 10%, and they will go from $4 trillion, and even in the next five, seven years, if they double to, like, $8 trillion, imagine, that's about $800 billion of potential funds, you know, flowing this way that need to be invested. It's not only about the issuers, it's mostly about the flow of capital, a two-way flow of capital that will happen. Of course, a lot of the companies in the Middle East, they want to diversify. They want to make sure that they are investing in technology, and what they want is funding, international funding.
For any company in the Middle East that is important, is significant. Like you said, some of them don't need funding, but they need investors to buy into it to provide their diversification that they can have by, and therefore it's, it may be more of a secondary sale.
They need lots of capital investing in their companies and we have, like, the best market for that because with the new changing rules that are occurring, whereby international companies that list on a primary basis on our markets, that will give a possibility for companies to access not only all the great international investors, but also some of the domestic China investors that are hard to access in any other way, like, for example, the retail investors that qualify for Southbound Stock Connect. We think that our market is like, you know, in a really interesting position to benefit from companies that want to be able to access those investor base.
At the same time, we are targeting all those investors from, you know, those funds in the Middle East that want to diversify their exposure, and they want to increase their investments in China. This is like a perfect combination, and that's why we spend so much time. That's, you know, what's driving us having conversations with Tadawul and signing an MoU to study cross-listing, to study what else can we do in FinTech? Is there anything that we can do around ESG, climate? These are very interesting things. Still in the early stages, early days, but the point is that the Middle East is going to be an important region for us. That's the first question.
As to the second question around the Specialist Technology chapter, we've seen. Of course, we've heard the announcement by the Financial Secretary. One of the things that happened is, over the last few months as we were consulting on this, we've received a lot of comments. There was a lot of interest, companies that wanted to participate in this. I think many companies have been preparing for this for some time now. All that I can say is that the comments and interest that we've heard has been great. Given that I have Bonnie here, even though she has, like, a new role today, but she's been in that role for the last year, so she knows a lot of this.
I'll let her make a few comments and maybe Vanessa, you can answer the tax question.
Yeah. Thank you, Gucho. Gary, I think just to supplement what Gucho has said, to your specific question, how does this affect the trend that companies are converting their secondary listings to a primary listing? I would say that in that regard, actually, that trend is taking place regardless of whether they are Specialist Technology or not Specialist Technology. I think the benefit is very clear for everyone to see. By being primarily listed on our markets, they are eligible therefore to be Stock Connect included. I would not confine, you know, that trend to simply, you know, in the context of Specialist Technology.
Another implication is, on top of what Gucho has mentioned, that, you know, a lot of companies which are still private companies have already expressed their interest to explore listing under the new chapter. This chapter potentially will also capture some companies which are currently listed on another exchange, which may be interested to come back for homecoming listing. There are a few of them, or a number of them out there, which currently may not meet our Main Board requirement, but with the new chapter may become eligible. They may, you know, consider coming back for listing via the homecoming route. You know, just those two points to supplement.
Hi, Gary, it's Vanessa. On effective tax rate, there are two things worth noting. First of all, you may recall that in Q2 last year, we booked a deferred tax adjustment in respect of the higher U.K. tax rate, and that was $160 million one-off. The second thing to note is that due to the higher interest rate environment, we have now got higher non-taxable net investment income, so that also impacts the tax rate.
Thank you. Next question, please.
Thank you. Your next question comes from Michael Li with Bank of America Securities. Please go ahead.
Thank you. Thank you, Gucho and Vanessa for the resilient results. Speaking of your Middle East trip, congrats on Argentina's victory of, in World Cup. I have two questions. The first question is, Hong Kong Government is recently talking about a lot about Virtual Assets, Web3 and other things like crypto. Any role Hong Kong Exchange will take in this kind of changes and plan? This is the first question. The second question is that can you make some comments on the recent changes of China's domestic companies' overseas listing rules, and also China's IPO registration reform in the Main Board? Do you think it's a kind of challenge to Hong Kong Exchange's IPO pipeline?
It seems to me that China regulators are encouraging more Chinese companies to go to Switzerland for to issue GDRs, including one of the largest companies in the C 連 板, CATL. Do you think that Hong Kong needs to be more aggressive to get these good companies to get listed in Hong Kong? Thank you.
Okay. Thank you, Michael. So the first one around the recent announcements by the SFC regarding the cryptocurrency rules and the possibility of retail to participate. We did announce over the last month that 3 new ETFs, or a couple of months, I would say, 3 new ETFs listed in our market, 2 Bitcoin-based ETFs and 1 Ether-based ETF. We were the first Exchange in Asia to offer crypto ETFs. It puts us at the forefront. We are obviously looking at the sector in detail, trying to understand what the possibilities are. The areas that are strategic advantage to us is the trust and confidence that investors have in a brand like HKEX.
Given the events around FTX and other companies whereby investors feel a little bit insecure these days into where their assets are, there is a role for a well-regarded, high-reputation type of player. We're not going to be an overnight crypto exchange, but we do think that there are some areas of the market where someone like us could play a role. We're still in early stages of looking at what the best way to play in this market is and how we play in digital assets, tokenized assets, and services like custody, et cetera. That's the first one.
The second one around overseas listing rules and also the registration-based IPO regime that China has announced and made across the board in their market. First there, I think there are, you know, some positive things and some things that maybe generate a bit more companies to consider all the exchanges that they, where they can list. In terms of the rules itself, the part that we like is that it, it sets a level playing field on a lot of things. Because before there was a lot of questions around like, "Well, is this a VIE? Can this trade in this place or not? Is this legal, is not legal?" Sometimes you need permission, sometimes you don't.
There is clarity that companies that are going to be trading internationally, whether they are H-shares or Red Chips or any type of VIE company, they need to get that permission. There is a lot of clarity around requirements of a clearance for cybersecurity issues as well. There's consistency in how that is done. I see that as a positive thing for HKEX, because in the past what happened is that we had stricter rules than others in terms of who can qualify for our market, so that is something to consider. I'll let Bonnie comment on this a little bit later. Let me just mention something on registration base and also on the GDRs.
On the registration-based system, it's actually, this is actually something that has been already implemented, as you know, in the STAR Market and then later in ChiNext. What they're doing is they're broadening it to their Main Boards. It's good that they're following a system closer to the system that we have, so it creates a little bit of consistency. Remember that mainland exchanges are our partners. The more they trade, the more people come through our Connect program and do that, the more international players. I mean, we do benefit one way or another. The question is, "Well, you may benefit more if they list in your market." Yeah, that may be true, but the reality is northbound is like, you know, many days north of RMB 100 billion.
Like, you know, in some cases bigger than our own, you know, trading in our home market and we participate in that. So we're glad to see, you know, the market becoming more sophisticated, developed, and so we welcome it. On the GDRs, many companies are starting to consider GDRs because it's a way of getting funding relatively quick, with limited regulation. These companies, as you well know, are companies that already have an H-share offering. These are companies that are already publicly listed. There's no, like, significant price discovery. They essentially are issuing at a 10% discount. It doesn't generate any liquidity for the markets where they're doing these GDRs.
All the shares after a certain amount of time, they go back to the H-share market. The thing that we like about this is that it creates more connectivity between China and the world. The more connectivity there is, the more trust and confidence is built in terms of like dealing with Chinese securities and many countries around the world. That part is good. It may be, as you well pointed out, taking some companies that would have considered an H-share because they wanted to get offshore funding. Some company may say, "You know, it's easier for me to just do instead of an H-share, just like to do a GDR." That is, you know, a fair point.
We think that this is a market that is very, very different than the market that we're trying to create, which is real supply and demand internationally. So, Bonnie, I don't know if you want to make any comments about the-.
Maybe just one point, Michael, to add, or to build on, Gucho 's comment about the leveling playing field. So far as these, overseas listing, rules which the CSRC has now, made effective, I think you can look at the level or leveling of the playing field in two dimensions
The playing field is being leveled between H-share companies and Red Chip companies. You would know that in the past, if you are an a PRC law incorporated company, and you wanna come to Hong Kong to do an H-share IPO, you need to seek CSRC approval first. Whereas Red Chip, you know, tends to not fall within that requirement. By now, you know, under these new regulations, basically, regardless of whether you're Red Chip or H-share, you go through a similar process. In the case of H-share, it's, you know, a formal approval, you know, which you need to seek from the CSRC, and in case of the Red Chip, you need to do the registration, the bei'an.
In that regard, you know, that's one dimension of the leveling of the playing field. The second dimension is between Hong Kong market and other overseas markets. What Gucho just now mentioned, in some regards, you know, certain requirements in our market are perceived to be more stringent. Say, for example, in the case of VIE, if a VIE company wanted to list in the U.S., the market convention is that because it's disclosure-based, it doesn't matter how you organize your VIE. Whereas, under, you know, our regulation in Hong Kong, it's slightly more prescriptive. You do need to go through a more rigor in terms of seeking legal opinion and whatnot. Now, going forward, because regardless of whether a company choose to go to a U.S.
market, an overseas market, or Hong Kong, they go through the same process, you know, in obtaining CSRC registration. Part of that registration will be to look at the legality of the VIE. Therefore, you can see that, you know, in that regard, the playing field is also being leveled. You know, I echo Gucho's point that this is actually providing a lot more consistency, you know, in terms of, you know, the legal requirements or the regulatory requirements that China businesses need to get onshore in the mainland when they wanna pursue an overseas listing. That's a good development in our minds.
Can we take the next question, please?
Thank you. Your next question comes from Gurpreet Sahi with Goldman Sachs. Please go ahead.
Thank you, management, for taking my question. Gurpreet with Goldman Sachs. A couple, please. First of all, Dual Counter. Can you please update us regarding the progress here? More specifically as to how many companies, ballpark, are we looking to start with? There was some news that it could be towards the middle of the year, et cetera. The second one is A50 futures. I see the good traction on derivatives overall, A50 continues to lag compared to the competition in Singapore. Gucho, what's the feedback from the market participant, or maybe Wilfred is online can share. With respect to we have some history now, is more history needed for the quant funds to jump into this one? Thank you very much.
Thank you very much, Gurpreet. I'm going to let Wilfred take this one since he's been spending a lot of time on Dual Counter specifically and also on derivatives. Go for it, Wilfred.
Sure. Thank you, Gucho. Good to get connected, Gurpreet. Long time no see. Maybe a quick update on Dual Counter. As we have highlighted in a lot of our communications, the Dual Counter we are expecting to be coming out around middle of the year. Our thoughts is going to be around putting a market maker mechanism into it to facilitate the liquidity linkages between the primary counter, which is the Hong Kong dollar counter, and the secondary counter, which is the renminbi counter, initially as the stage number 1.
At stage 2, as this market is developing, obviously, we are going to see the importance of the Southbound, i.e., the mainland Renminbi flow coming into Hong Kong trading in that counter, and that is the kind of path forward. I would say, in terms of the readiness of the issuers and the market maker front, we have been making very good progress on both fronts, that we have committed market makers and we have committed issuers that is going to be representative of the trading volume in the market. You should reasonably see more of those details coming out later when we are ready to make a further announcement there.
I think we are making very good progress in terms of the preparations and the planning around the Dual Counter. It's going to be very interesting, and I think it's going to be very good for the liquidity of our market further developments as we augment the participants in this market. Maybe I will take on the questions around the A50 contract itself. I would say the A50 contract, I want people to be realizing that it has been launched for a little bit over a year, so we are at a very, very early stage compared to other contracts that have been
Launch and has been in terms of decade, right, existing. 1 important point we need to see is the continued development of the interest of creating products on the back of the index itself, and also the stability and the growth potential on open interest of the contract itself, which represent an important position holding from the investment community, which is reflective of the product developments.
I believe that Hong Kong as it is the home to the connectivity into Asia market and being that gateway of linking liquidity of the Mainland and Hong Kong, we're seeing a lot of increasing no matter global interest into trading that products and getting to understand, know more about the index itself, as well as Mainland flows who are looking very interested into transacting more of this contract in Hong Kong where we have that client ecosystem. I think those are going to be healthy growth potential as we developing this market. I would say that we are still in a very, very early stage at this moment.
Thank you, Wilfred. In the interest of time, we will have one more question. Operator, over to you.
Thank you. Your next question comes from Betty Li with CLSA. Please go ahead.
Thank you so much, Gucho and Vanessa Lau, for giving me the chance to ask the last question. This is Betty Li from CLSA. Two questions from me, please. The first one would be more on the strategic side. Understand that Hong Kong SFC and CSRC has jointly announced the potential inclusion of overseas listing into the Southbound Connect. Just wonder if there's any progress around the regulators that you could share with us, and is there any expected timeline for the official launch? The second one is still around the LME nickel incident. Just wonder what your outlook and view, for I mean, for the ongoing professional and legal fee. Thank you so much.
Okay. Thank you, Betty. Let me address both issues. As it relates to international listings on Stock Connect, things are progressing well. This is not an extremely difficult task in terms of, like, infrastructure. It's significantly easier than a lot of the things that we're doing because it's just an expansion that allows to include companies. As everything, whenever you bring in a new twist, like for example, international companies, you have to think about tax issues, how they do different onshore participant take into account those situations and everything. It does take a little bit of time, but it's progressing very well and we think this will be announced imminently. Of course, this will be a good initiative.
The initiative that complements it very well is when you have the ability to not only have international companies listed, but then you have also the ability by Chinese investors to buy those shares in renminbi through a Dual Counter structure. As Wilfred mentioned, the Dual Counter is something that should be done over the next few months, couple of months, let's say. The ability for onshore investors to use that Dual Counter, that may take a little bit longer, so I would say like the rest of the year, let's say. In any case, the point being that the inclusion of international companies, that is going to be, you know, very imminent. It's going to happen very, very shortly.
The second question around LME. We are spending money, as you can imagine, on the 166 on the lawyers, the Oliver Wyman report, so we have consultants, lawyers. We are committing the resources that we need to make sure that we address the issue and we take it seriously. It's hard to anticipate how long this will take, but I can tell you some things are starting to wind down, like for example, the Oliver Wyman work, it's done. What will happen to the litigation? That will follow its course and I cannot comment on it because I don't have any specific knowledge.
What we can ascertain is that, of course, we'll defend our position vigorously, and we feel very good about the fact that we always acted in the interest of the market as a whole. We feel very confident with our position, and we'll continue to defend the case as much as we can. That's probably as much as I can say in terms of the, let's say, expenses related to LME at this point.
Thank you very much, Gucho. This marks the end of today's session. Thank you everyone on the line for joining us today. We hope to meet and speak to you again very soon. Have a good evening.