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Hong Kong Stock Exchange
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The Hong Kong Stock Exchange (also (HKEX), ) 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 capitalization, 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 capitalization of $2.7 trillion.
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Encyclopedia
The Hong Kong Stock Exchange (also (HKEX), ) 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 capitalization, 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 capitalization of $2.7 trillion. Hong Kong Exchanges and Clearing is the holding company for the exchange.
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. 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 monopolized 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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Hong Kong Futures Exchange Ltd (Founded 1976) |
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Hong Kong Securities Clearing Company Ltd (Founded 1989) |
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Business
Computers were integrated on 2 April 1986, which has helped modernize the system. In 1993 the exchange launched the "Automatic Order Matching and Execution System" (AMS) that was replaced by the third generation system (AMS/3) in October 2000. Systems as such were added to meet the increased popularity of online Stock trading.
Trading Hours: From 10:00 to 12:30 and from 14:30 to 16:00
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.
Trading Characteristics
- The trading day is divided into a morning and an afternoon session, with a two-hour lunch break in between. The morning session is from 10:00 am to 12:30 pm and the afternoon session is from 2:30 pm to 4:00 pm, local time. Traders based in other countries should note that Hong Kong does not have daylight saving time when converting these times to their own time zone.
- 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.
- In Hong Kong, 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), and it may not be possible to buy in other than multiples of the board lot size.
- 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.
- 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
External links
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