| Hong Kong Stock Exchange | |
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| Type | Stock exchange |
| Location | Central, Hong Kong |
| Founded | 1891 |
| Currency | Hong Kong dollar |
| Indexes | Hang Seng Index |
| Website | hkex.com.hk |
The Hong Kong Stock Exchange (traditional Chinese: 香港交易所, also 港交所 (HKEX), SEHK: 0388) is the stock exchange of Hong Kong. The exchange has predominantly been the main exchange for Hong Kong where shares of listed companies are traded. It is Asia's third largest stock exchange in terms of market capitalisation, behind the Tokyo Stock Exchange and the Shanghai Stock Exchange. As of 31 December 2007, the Hong Kong Stock Exchange had 1,241 listed companies with a combined market capitalisation of $2.7 trillion. Hong Kong Exchanges and Clearing is the holding company for the exchange.
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History
The history of the securities exchange began formally in the late 19th century with the first establishment in 1891, though informal securities exchanges have been known to take place since 1861[1]. The exchange has predominantly been the main exchange for Hong Kong despite co-existing with other exchanges at different point in time. After a series of complex mergers and acquisitions, HKSE remains to be the core. From 1947 to 1969 the exchange monopolised the market.
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Hong Kong Stockbrokers Association (Founded 1921) | |||||
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Far East Exchange Ltd (Founded 1969) | |
Kam Ngan Stock Exchange Ltd (Founded 1971) | |
Kowloon Stock Exchange Ltd (Founded 1972) | |
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Hong Kong Futures Exchange Ltd (Founded 1976) | |
Hong Kong Securities Clearing Company Ltd (Founded 1989) |
Trading hours
The trading day consists of:
- A pre-opening auction session from 9:30 am to 9:50 am. The opening price of a security is reported shortly after 9:50 am.[2]
- A morning continuous trading session from 10:00 am to 12:30 pm[3]
- An afternoon continuous trading session from 2:30 pm to 4:00 pm[3]
The closing price is reported as the median of five price snapshots taken from 3:59 to 4:00 pm every 15 seconds.[4] In May 2008, the exchange also implemented a closing auction session to run from 4:00 pm to 4:10 pm, with a similar pricing mechanism as the opening auction; however, this resulted in significant fluctuations in the closing prices of stocks and suspicions of market manipulation. Initially, the exchange proposed limiting price fluctuations in the auction sessions to 2%; in the end, they removed the closing session entirely in March 2009.[5]
Electronic trading
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| Economy of Hong Kong |
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Geography - History - Politics Hong Kong Portal |
The exchange first introduced a computer-assisted trading system on 2 April 1986.[6] In 1993 the exchange launched the "Automatic Order Matching and Execution System" (AMS), which was replaced by the third generation system (AMS/3) in October 2000.[7]
Regulatory role
David Webb, independent non-executive director of the Exchange since 2003, has been arguing for a super regulatory authority to assume that role as regulator, as there is inherent conflict between its commercial and regulatory roles. In the meantime, he argues for improved investor representation on the Hong Kong Stock Exchange.
In 2007, the uproar by smaller local stockbrokers over the decision by board of directors to cut minimum trading spreads for equities and warrants trading at between 25 HK cents and HK$2 caused the new board to vote to reverse the decision. The reforms were to be implemented in the first quarter, but was put back on the table following protests by brokers. Webb criticised the board for caving in to vested interests.[8]
Trading characteristics
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This section needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (June 2009) |
- It is perfectly normal for Hong Kong stocks of even well-known companies to trade at prices that correspond to less than HK$4 a share. A Hong Kong stock would not be considered a penny stock unless its price was less than about HK$ 0.50.
- Each stock has its own individual board lot size (an online broker will usually display this along with the stock price when you get a quote); purchases in amounts which are not multiples of the board lot size are done in a separate "odd lot market".
- There is a close-in-price rule for limit orders, which must be within 24 ticks of the current price. Individual brokers may impose an even stricter rule; for instance, HSBC requires limit orders to be within 10 ticks of the current price. Thus it is not possible to exploit volatility by placing a lowball limit order in the hope that it might be hit before the end of a trading session[original research?][citation needed].
- Broker commissions in Hong Kong are comparatively high, though recently Interactive Brokers LLC has entered the HK Brokerage market with a minimum brokerage commission of only HK18 (~US$ 2.3).
40 largest stocks by market capitalisation
Source: Bloomberg, in billions of Hong Kong dollars, Data updated on 20 January 2007
- Industrial & Commercial Bank of China: $1,720.49
- PetroChina: $1,713.23
- HSBC Holdings: $1,654.82
- China Mobile: $1,411.83
- Bank of China: $1,175.62
- China Life Insurance: $1,114.84
- China Construction Bank: $1,074.01
- Sinopec Corp: $769.91
- Manulife Financial: $404.27
- Bank of Communications: $392.54
- China Shenhua Energy: $364.51
- Hutchison Whampoa: $342.78
- China Telecom: $317.25
- Standard Chartered: $315.76
- CNOOC: $290.30
- Sun Hung Kai Properties: $249.18
- China Merchants Bank: $245.62
- Cheung Kong Holdings: $244.12
- Ping An Insurance Group of China: $230.77
- Bank of China (Hong Kong) Holdings: $225.73
- Hang Seng Bank: $215.27
- Foxconn International Holdings: $171.45
- CLP Holdings: $140.52
- Swire Pacific: $136.98
- China Communications Construction: $128.69
- China Unicom: $127.27
- China Netcom: $121.84
- MTR Corporation: $116.24
- Esprit Holdings: $98.82
- Hong Kong & China Gas: $96.29
- Henderson Land Development: $94.99
- Hong Kong Exchanges and Clearing: $94.60
- Huaneng Power International: $90.30
- Hutchison Telecommunications International: $89.84
- Hang Lung Properties: $88.23
- Sino Land: $87.78
- Cathay Pacific Airways: $84.21
- Aluminium Corp of China: $84.08
- Air China: $84.02
- Li & Fung: $82.17
See also
- Hang Seng Index
- Stock disasters in Hong Kong
- Economy of Hong Kong
- List of Chinese companies
- Companies listed on the Hong Kong Stock Exchange
- A Share
- H Share
- List of stock exchanges
- Leading stock
References
- ^ HKedu. "HKU." Hong Kong U. Retrieved on 15 February 2007.
- ^ Pre-opening Session Securities Market, hkex.com.hk, http://www.hkex.com.hk/infra/tradmech/pleaflet.pdf, retrieved 2009-06-05
- ^ a b Trading Hours, hkex.com.hk, 2009-03-23, http://www.hkex.com.hk/tradinfo/tradcal/tradcal_1.htm, retrieved 2009-06-05
- ^ Closing Price Calculation, hkex.com.hk, 2009-03-23, http://www.hkex.com.hk/tradinfo/closepricecal/closepricecal.pdf, retrieved 2009-06-05
- ^ Ng, Katherine (2009-03-13), "HKEx scraps closing auction", The Hong Kong Standard, http://www.thestandard.com.hk/news_detail.asp?we_cat=11&art_id=79490&sid=23085832&con_type=1&d_str=20090313&fc=8, retrieved 2009-06-05
- ^ History of HKEx and its markets, hkex.com.hk, 2004-01-20, http://www.hkex.com.hk/exchange/history/history.htm, retrieved 2007-02-11
- ^ "HKEx Builds its Market Infrastructure with Competitive Technology", HKEx Newsletter, October 2004, http://www.hkex.com.hk/publication/newsltr/2004-10-06-e.pdf, retrieved 2009-06-03
- ^ Cheung, Jackie (15 February 2007), "Plan for tighter spreads dropped", The Hong Kong Standard, http://www.thestandard.com.hk/news_detail.asp?pp_cat=2&art_id=38391&sid=12232131&con_type=1&d_str=20070215&sear_year=2007, retrieved 2007-03-19
External links
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