Hong Kong Stock Exchange
| Hong Kong Stock Exchange |
| Chinese |
香港交易所 |
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| alternative Chinese name |
| Chinese |
港交所 |
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The Hong Kong Stock Exchange (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 second largest stock exchange in terms of market capitalisation, behind the Tokyo Stock Exchange. As of 31 December 2007, the Hong Kong Stock Exchange had 1,241 listed companies with a combined market capitalization of $2.7 trillion. Hong Kong Exchanges and Clearing is the holding company for the exchange.
History
Hong Kong Exchange Trade Lobby
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.
| Association of Stockbrokers in Hong Kong (Founded 1891) |
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| (1914) Renamed to Hong Kong Stock Exchange |
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| (1947) A merger is made after World War II with Hong Kong Stock Exchange retaining the name |
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Hong Kong Stockbrokers Association (Founded 1921) |
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| Hong Kong Stockholders Association Ltd (Founded 1978) allow info sharing between HKSE and other exchanges |
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Far East Exchange Ltd (Founded 1969) |
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Kam Ngan Stock Exchange Ltd (Founded 1971) |
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Kowloon Stock Exchange Ltd (Founded 1972) |
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| (1986) HKSE merges with other exchanges and retain the name but also presented as Stock Exchange of Hong Kong |
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| (2000) Hong Kong Exchanges and Clearing becomes the holding company for Hong Kong Stock Exchange |
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Hong Kong Futures Exchange Ltd (Founded 1976) |
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Hong Kong Securities Clearing Company Ltd (Founded 1989) |
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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
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
- 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. Broker support for triggered order types such as market-if-touched orders would allow placing orders further away, which would be sent to the exchange when the price condition was established.
40 largest stocks by market capitalisation
Source: Bloomberg, in billions of Hong Kong dollars, Data updated on 20 April 2010
- PetroChina: $2,492.04
- Industrial & Commercial Bank of China: $1,810.14
- China Mobile: $1,584.90
- China Construction Bank: $1,514.72
- HSBC Holdings: $1,433.27
- Bank of China: $1,127.57
- Sinopec Corp: $957.57
- China Life Insurance: $922.64
- China Shenhua Energy: $636.23
- CNOOC: $609.29
- Ping An Insurance Group of China: $448.11
- Bank of Communications: $439.83
- Standard Chartered: $429.77
- China Merchants Bank: $366.36
- China Telecom: $309.16
- Sun Hung Kai Properties: $299.51
- Tencent Holdings: $286.53
See also
- A Share
- Companies listed on the Hong Kong Stock Exchange
- Economy of Hong Kong
- H Share
- Hang Seng Index
- Leading stock
- List of Chinese companies
- List of stock exchanges
- Stock disasters in Hong Kong
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
- ↑ 3.0 3.1 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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Economy of Hong Kong |
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| History |
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| Currency |
Hong Kong dollar • Hong Kong Mint • Hong Kong Note Printing • Banknotes of the Hong Kong dollar • Coins of the Hong Kong dollar
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| Industry and Business |
List of companies of Hong Kong • Agriculture and aquaculture in Hong Kong • CSI Cross-Straits 500 Index • Hong Kong Export Credit Insurance Corporation
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| Government agencies |
Hong Kong Trade Development Council • Hong Kong Monetary Authority • Inland Revenue Department • Agriculture, Fisheries and Conservation Department
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| Employment and Tax |
Employment in Hong Kong • Estate Duty Ordinance • Goepfert case • Inland Revenue Ordinance • Partnership taxation • Profit tax • Rates (tax) • SDO s45 Transfer between associated bodies corporate • Salaries tax • Minimum wage • Stamp Duty Ordinance • Stamp duty • Goods and Service Tax
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Infrastructure
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Port of Hong Kong • Hong Kong-Zhuhai-Macau Bridge
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| Rankings |
International rankings of Hong Kong
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| Finance and Banking |
Hong Kong Futures Exchange • Hong Kong Exchanges and Clearing • Securities and Futures Commission • Hong Kong Stock Exchange • Hong Kong Securities Institute • Linked exchange rate • P Chips Frauds • Red chips • Electronic Payment Services • Growth Enterprise Market • Hong Kong Mercantile Exchange • Hang Seng Index
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| Agreements |
CEPA • Ship Registration in Hong Kong • Outward Processing Arrangement
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| Energy |
List of power stations in Hong Kong •
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| Other |
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See also:  Economy of Macau • Economy of the People's Republic of China |
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