Hong Kong's market is the worst performer globally among major stock markets, beaten down by exposure to U.S.-listed companies, and with the city oppressed. By ALEX FREW MCMILLAN Dec 15, 2021 | 06:34 AM EST Stocks quotes in this article: DIDI
Full Answer
How does the Hong Kong stock exchange work?
The Hong Kong Stock Exchange The Hong Kong Stock Exchange is one of the top 10 largest stock exchanges. The firms that are listed on the Hong Kong Stock Exchange represent close to $2 trillion in total market capitalization. Roughly 1,500 companies are listed on the exchange, which dates back to just prior to 1900, when it first started operating.
Why is Hong Kong's stock market so bad this year?
Hong Kong's market is the worst performer globally among major stock markets, beaten down by exposure to U.S.-listed companies, and with the city oppressed. Hong Kong is the worst performing major stock market not only in Asia but the entire world so far this year. The hamstrung Hang Seng index is hobbling into year end.
Is Hong Kong a good place to invest in global stocks?
Hong Kong has "H" shares that are open to global investors. Exchanges that also deserve mention include the Nasdaq, which is also based in the U.S., the Bombay Stock Exchange in India, Sao Paulo Stock Exchange in Brazil, and the Australian Stock Exchange. These exchanges continue to grow in influence on the global stage.
Is HKEX part of China's stock market?
That makes the HKEx loosely part of China's stock market. The Shanghai stock exchange is China's largest. Its total market capitalization was $4.1 trillion in 2016. 10 Most of the companies listed are the large, state-owned companies responsible for China's economic growth. 1 Most investors are pension funds and banks.
How does the stock market impact the world?
A rising stock market is usually aligned with a growing economy and leads to greater investor confidence. Investor confidence in stocks leads to more buying activity which can also help to push prices higher. When stocks rise, people invested in the equity markets gain wealth.
Why is Hong Kong important to the rest of the world?
Given its strategic geographical location, well-developed infrastructure and international communication network, Hong Kong plays an important entrepot role for the trade between the Mainland and the rest of the world.
Is the Hong Kong stock market efficient?
Test results reflect that Hong Kong and Shanghai A stock market are more efficient than other China stock markets.
Why does Hong Kong matter so much to China?
Hong Kong is a key source of capital for corporate China It also provides a gateway through which Western investors can access the mainland stock market, and the city is a key hub for mainland firms when they are seeking to raise foreign currency, particularly US-dollar denominated bonds.
Why is Hong Kong considered as global cities?
Hong Kong has positioned itself to become the world city of Asia. This positioning is designed to highlight Hong Kong's existing strengths in areas such as financial services, trade, tourism, transport, communications, and as a regional hub for international business and a major city in China.
Is Hong Kong more developed than China?
Hong Kong is still richer, but the gap is narrowing, with its per capita income now five times higher than China's. In the period right after 1997, China wanted to strengthen Hong Kong's reputation as an open and market-oriented economy governed by the rule of law.
Is Chinese stock market efficient?
But, as any emerging market, the Chinese stock markets are inefficient [19]. However, the reforms in regulations as well as in the attitudes of regulators have rendered the stock market more efficient. One of the most important reforms was CSRC (China Securities Regulatory Commission) reform in October 2011.
Is the Hong Kong stock market open?
Hong Kong Securities Market 9:00 a.m. - 9:30 a.m. 12:00 noon - 1:00 p.m.
What is the closing time of the Hong Kong stock market?
When is the Hong Kong Stock Exchange open for trading? The Hong Kong Stock Exchange is open Monday through Friday from 9:30am to 12:00pm and 1:00pm to 4:00pm Hong Kong Standard Time (GMT+08:00).
Why Hong Kong is important to US?
As one of the largest trading surplus partners with the United States, valued at $31 billion, Hong Kong maintains large imports of American aircraft and spacecraft. Electric machinery, pearls, gold, diamonds, works of art, meat, and fruit and nuts are also significant imports from Hong Kong.
What is issue between China and Hong Kong?
The cultural and economic differences are widely considered as a primary cause of the conflict between Hong Kong and mainland China. The differences between Hong Kong people and mainlanders, such as language, as well as the significant growth in number of mainland visitors, have caused tension.
How much does Hong Kong contribute to China GDP?
Hong Kong's share of China's GDP dropped from 16 percent in 1997 to just three percent in 2018. Over the same time, Hong Kong's contribution to China's total exports fell from 24 percent to about 12 percent.
What is the Hong Kong Stock Exchange?
The Hong Kong Stock Exchange (HKG) is Asia’s third-largest stock exchange based on market capitalization#N#Market Capitalization Market Capitalization (Market Cap) is the most recent market value of a company’s outstanding shares . Market Cap is equal to the current share price multiplied by the number of shares outstanding. The investing community often uses the market capitalization value to rank companies#N#, trailing only the Tokyo Stock Exchange and the Shanghai Stock Exchange. It is also one of the fastest-growing market exchanges in Asia, with 2,137 listed companies as of 2020, up from 1,200 in 2008.
When was the Hong Kong Stock Exchange established?
The Hong Kong Stock Exchange traces its origin to the Association of Stockbrokers in Hong Kong, established in 1891 and renamed in 1914.
What is the SFC in Hong Kong?
The Securities and Futures Commission (SFC) serves as the front-lead regulator of the Hong Kong Stock Exchange (HKG) to integrate and implement provisions on securities and financial products, as well as to protect investors.
What is the purpose of the Securities and Futures Commission?
The primary role of the regulation is to consolidate and implement legislation on securities and financial products, as well as to protect investors by ensuring a level field.
What is capitalization weighted index?
In a capitalization-weighted index, companies with larger market capitalization exert a greater impact on the index value. London Stock Exchange (LSE) The London Stock Exchange (LSE), which is based in London, the United Kingdom, is one of the leading stock markets in the world.
What is HKEx stock?
Hong Kong Exchanges and Clearing Limited (HKEx) The Hong Kong Exchanges and Clearing Limited (HKEx) is the holding company of the Hong Kong Stock Exchange. Its formation stemmed from progressive integration of the derivative markets and securities, which saw the creation of the Stock Exchange of Hong Kong Limited (SEHK), ...
When did the Hong Kong Securities and Futures Commission merge?
Within the same year, the Securities and Futures Commission (SFC) was created as the single statutory securities and future market regulator. In 2000, HKSE merged with the Hong Securities Clearing Company and Hong Kong Futures Exchange (HKFE) to form the Hong Kong Exchanges and Clearing Limited.
What is Hong Kong?
Hong Kong, a former British colony that returned to Chinese rule in 1997, is a global financial and business center that connects China and the world. Protests in the city were initially sparked by proposed changes to a law that would have allowed extradition to mainland China.
What are the anti-government protests in Hong Kong?
Anti-government demonstrations in Hong Kong have at times involved violent clashes between protesters and the police. The protests, along with uncertainties such as the U.S.-China trade war, sent the Hong Kong economy into a recession for the first time in a decade.
Is Hong Kong in recession?
Hong Kong in recession. The protests, along with uncertainties such as the U.S.-China trade war , sent the Hong Kong economy into a recession for the first time in a decade . It could get worse for the city.
Is the Hang Seng index up in 2019?
Stocks up in 2019. Despite the pressure on the economy, Hong Kong’s benchmark stock index — the Hang Seng Index — appears on track to end 2019 higher than where it started the year. That’s because investors still see the Hong Kong stock market as a way to buy and sell Chinese assets, according to Mark Mobius, founding partner at Mobius Capital ...
When did the Shanghai Stock Exchange open?
The Shanghai Stock Exchange. The Shanghai Stock Exchange is one of the newest in the world. It opened in late 1990, and 1,500 companies trade on its exchange. Trading volume continues to increase but has fallen dramatically since 2008, which marked a peak in terms of investment interest in China.
Which country has the largest stock exchange?
Below is an overview of some of the largest exchanges in the world. 1. 1. The New York Stock Exchange.
What is the largest exchange in Japan?
The Tokyo Stock Exchange. The Tokyo Stock Exchange ( TSE) is the largest exchange in Japan and also number two behind the NYSE in terms of the more than $3 trillion in market capitalization the companies on its exchange represent. A stronger national currency is part of the reason behind the increasing size of the TSE.
What is the name of the exchange that is part of the NYSE?
1. The New York Stock Exchange. The New York Stock Exchange ( NYSE) is part of NYSE EURONEXT, which now has exchanges in the U.S. and Europe. It estimates that its exchanges represent a third of all equities traded in the world. The NYSE continues to be one of the primary exchanges in the world and the largest in terms of ...
How many firms are listed on the TSE?
Around 2,000 firms are listed on the TSE. The exchange was estimated to have first opened in 1878 and partners with other exchanges around the world, such as the London Stock Exchange below. The Nikkei 225 index is one of the primary and most popular indexes that represent some of the largest and most successful firms in Japan.
How much is the LSE?
The London Stock Exchange. The London Stock Exchange ( LSE) qualifies as a top-five stock market, with an estimated $2.2 trillion in stock market capitalization from the companies listed on its exchange. Its estimated founding was 1801, or nearly a decade following the opening of the NYSE.
When was the NYSE first traded?
The NYSE has been around since 1792 and it is believed that Bank of New York, which is now part of Bank of New York Mellon, was the first stock traded. The ringing of the NYSE bell at the start and end of the day is a common occurrence in today's media. The business has grown incredibly competitive in recent years.
What is Hong Kong Exchanges and Clearing Limited?
3.3%. The Hong Kong Exchanges and Clearing Limited or HKEx, is a stock market and derivatives market. The Hang Seng is the index that tracks the Hong Kong stock exchange. 13 It is in Hong Kong, a city-state that was transferred from the United Kingdom to China in 1997. Mainland China selects Hong Kong's administrator, but it has its own currency, ...
What is China stock market?
China's stock market is an exchange where shares of Chinese companies are traded. It was founded 100 years ago. It's the second largest in the world after that of the United States. 1 On June 20, 2017, Morgan Stanley Capital International announced it was adding China A-shares to its emerging market index.
When did the Shanghai and Shenzhen exchanges open?
The Shanghai and Shenzhen exchanges were opened by the Chinese government in 1990 as a way of modernizing China's economy. 10 The Hong Kong stock exchange is being integrated into the other Chinese exchanges. That makes the HKEx loosely part of China's stock market. The Shanghai stock exchange is China's largest.
What is Shanghai stock index?
SHCOMP does this by tracking the daily price of A-shares and B-shares weighted by the total number of shares issued. Price changes of larger companies affect the index more than those of smaller firms. That means it is a capitalization-weighted index, like the Standard & Poor’s 500. 19 20
When did China add Shenzhen to the Shanghai exchange?
In November 2014, the Chinese government linked the Shanghai exchange with the Hong Kong exchange through the Shanghai-Hong Kong Connect program, and added the Shenzhen market in late 2016. The Connect program allows foreign investors to buy shares of Chinese companies.
When was the first stock exchange opened in China?
China's first stock exchange opened in the 1860s in Shanghai. It closed for 41 years during the Cultural revolution. In 1990, the Shanghai Stock Exchange opened again. 1 Private investors bought shares of state-owned businesses.
What is HSI index?
HSI reports the prices of the largest and most frequently traded companies listed on the Hong Kong exchange. No company can represent more than 10 percent of the index value. Like the Shanghai index, it weighs the share prices by the number of shares. It also weighs the values by a free-float factor.
Why is the Hang Seng important to Hong Kong?
The global nature of Hong Kong's economy also means that the Hang Seng serves as a proxy for the wider Asian market— especially China's stock market, which is often mispriced due to capital restrictions.
What is the Hang Seng index?
The Hang Seng Index is a stock market index consisting of 50 of the largest and most liquid companies listed on the Hong Kong Stock Exchange. This accounts for 40% of its total market capitalization. 3 Like the S&P 500 in the United States, the index is designed to mimic the overall performance of the stock market at any given time.
Is China a political risk?
In addition to being an emerging market, China may present greater political risk, given its government's track record of intervention, the rise of state-run businesses, and unrest that affects the marketplace.
When was the Hong Kong stock market established?
The first formal stock exchange market was established in 1891 and called the Stockbrokers' Association of Hong Kong. In 1914 it was renamed the Hong Kong Stock Exchange. While the Stockbroker's Association created another exchange in 1921, the two merged to form the Hong Kong Stock Exchange in 1947 which re-established the country's stock market after World War II.
When did the London Stock Exchange start?
The London Stock Exchange (LSE) originally started out as a newspaper publication of market prices in 1698. However, in 1801 they started to facilitate the buying and selling of shares making it one of the oldest stock exchanges in the world.
What was the first electronic stock exchange?
This made the NASDAQ the world's first electronic stock exchange and they now specialise in listing only technology-based companies. After buying both the Boston and Philadelphia stock exchange in its early years, the NASDAQ reached a market capitalisation of around $10 trillion at the beginning of 2018.
What is the largest stock exchange in Japan?
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, founded in 1878. After World War II, the exchange went through a series of changes and is now known as the Japan Exchange Group. This group was created when the Tokyo Stock Exchange merged with the Osaka Securities Stock Exchange in 2013.
How many stock exchanges are there in the world?
There are now sixty major stock exchanges in the world which house stock markets all ranging in different sizes and trading volumes. This article will provide you with all you need to know about what goes on in a stock exchange and the history of the world's most important stock exchanges.
What is the most famous stock exchange?
The New York Stock Exchange. The New York Stock Exchange ( NYSE) is perhaps the world's most well-known stock exchange with its famous 9.30am opening bell which is televised and presented by leading business figures and celebrities.
When did the Euronext merger happen?
In 1997 the Amsterdam Stock Exchange and the European Options Exchange (EOE) merged. This gave birth to the widely used AEX stock market index. However, in September 2000 the exchange also merged with the Brussels Stock Exchange and the Paris Stock Exchange. The resulting entity is now known as Euronext.
When did the Shanghai Stock Exchange reopen?
While the Shanghai Stock Exchange (SSE) dates back to the 1860s, it only reopened in 1990 after being closed in 1949 when the Communists took power. The Shenzhen Stock Exchange (SZSE) also opened that same year, making China’s stock markets a mere 30 years old. While the Hong Kong Stock Exchange (HKG) was founded in 1891 ...
Why is China's stock market like a crazy casino?
The unsophisticated nature of the majority of Chinese investors has been one reason that China’s stock markets have been likened to a crazy casino rather than a tool for economic growth.
What is Xi Jinping's plan for 2020?
Updated May 1, 2020. Since first coming to power in 2012, Xi Jinping has preached economic reform as the way to achieve “the Chinese Dream.”. Some of the reform measures have been aimed at deepening China’s financial markets and giving stock markets a greater role in financing corporate investment. Considered home to the deepest financial markets ...
Where are H shares traded?
H shares are permitted to be traded by domestic and foreign investors alike and are listed on the Hong Kong exchange. Even though China's stock markets are becoming more open to foreign investments, international investors remain wary of jumping in.
Is China's stock market young?
Despite being some of the largest exchanges in the world, China’s stock markets are still relatively young and do not play as prominent a role in the Chinese economy as America’s do in the U.S. economy.
What is the Chinese government's pledge to Hong Kong?
The totemic pledge that Chinese sovereignty over Hong Kong would be guided by the principle of “one country, two systems” lies in ruins.
When did China change Hong Kong's election laws?
On March 11th, far to the north in a smoggy Beijing, delegates to the National People’s Congress, China’s pliant legislature, approved sweeping changes to Hong Kong’s election laws by a margin of 2,895 votes (there was one abstention). Branded “Patriots administering Hong Kong”, the amendments will effectively bar avowed opponents ...
What is the pre-handover of the Sino-British Declaration?
Chinese officials and state-backed scholars call the pre-handover Sino-British Declaration a “historical document” and accuse Western critics of colonial nostalgia. To focus on China’s breaking of old promises, though, is to risk missing the sheer scale of its ambitions for Hong Kong's future.
Does Hong Kong have a hard currency?
Operating outside the mainland’s strict capital controls, Hong Kong issues its own hard currency, the Hong Kong dollar, that is freely convertible against the American dollar, and offers Chinese firms access to some of the deepest pools of capital on Earth.
Is Hong Kong paying its chief executive in cash?
Last October it imposed banking and other sanctions on the chief executive and nine other mainland and Hong Kong officials accused of undermining the territory’s autonomy, in breach of long-standing Chinese commitments. The territory’s chief executive is now paid in cash, her home filling up with bank notes.
Who coined the Hong Kong formula?
The formula, coined in the 1980s by Deng Xiaoping, China’s paramount leader, spoke to Hong Kong’s unique value as a gateway to a vastly richer and more advanced Western world from which China could learn, a value which justified exceptionalism.
Is the Hong Kong dollar convertible?
But the most dramatic steps, involving changes to American policies that treat the Hong Kong dollar as a fully convertible currency, have not been taken, not least because the resulting pain would be felt worldwide. Western governments are not going to deter the demolition. The old Hong Kong is gone.
What is the GDP growth rate in Hong Kong?
On Thursday, Hong Kong’s government announced that it has lowered its 2019 GDP growth forecast to between 0% and 1%, from the original range of 2% to 3%. The protests over an extradition bill have spilled over into issues of freedoms and democracy, are almost into their third month and have crippled the Asian financial hub.
When will the protests in Hong Kong end?
The months-long protests in Hong Kong could come to an end soon, according to strategist David Roche, who said they will “be settled or crushed” before October 1 — the 70th anniversary of China’s National Day.
Is Hong Kong a small place?
From a larger perspective, Hong Kong is just a “tiny place” in a “very big vibrant economy” that is China. Meanwhile, Wall Street has not yet priced in the events in Hong Kong at this point, according to Tim Seymour, chief investment officer at Seymour Asset Management.
Hong Kong Stock Exchange Explained
- The Hong Kong Stock Exchange (HKG) is Asia’s third-largest stock exchange based on market capitalization, trailing only the Tokyo Stock Exchange and the Shanghai Stock Exchange. It is also one of the fastest-growing market exchanges in Asia, with 2,137 listed companies as of 2020, up from 1,200 in 2008. The combined market capitalization of the lis...
Development of The Hong Kong Stock Exchange
- The Hong Kong Stock Exchange can be traced back to 1891 when the Association of Stockbrokers in Hong Kong was established as the first formal stock exchange. In 1914, its name was changed to the Hong Kong Stock Exchange (HKSE). Non-Chinese membership characterized the exchange until 1921, when the Hong Kong Stockbrokers’ Association was formed, which wa…
Hong Kong Stock Exchange’s Structure
- The main regulatory board for the Hong Kong Stock Exchange is the Securities and Futures Commission (SFC). The commission was promulgated in 2003 as the Securities and Futures Commission Ordinance (SFCO) before other sector ordinances emerged. The primary role of the regulation is to consolidate and implement legislation on securities and financial products, as w…
Hong Kong Exchanges and Clearing Limited
- The Hong Kong Exchanges and Clearing Limited (HKEx) is the holding company of the Hong Kong Stock Exchange. Its formation stemmed from progressive integration of the derivative markets and securities, which saw the creation of the Stock Exchange of Hong Kong Limited (SEHK), the Hong Kong Futures Exchange Limited (HKFE), and their clearinghouses. By operating under the …
Special Considerations
- A new applicant for listing in the Hong Kong Stock Exchange is required to generate positive cash flow from its operating activities of at least an aggregate of HK$20 million for the first two financial years immediately after listing.
More Resources
- CFI is the official provider of the global Capital Markets & Securities Analyst (CMSA)™certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful: 1. Capitalization-Weighted Index 2. London Stock Exchange (LSE) 3. Dual-Class Stocks 4. New York Stock Exchange (NYSE)
The New York Stock Exchange
The Tokyo Stock Exchange
The London Stock Exchange
The Hong Kong Stock Exchange
- The Hong Kong Stock Exchange is one of the top 10 largest stock exchanges. The firms that are listed on the Hong Kong Stock Exchange represent close to $2 trillion in total market capitalization. Roughly 1,500 companies are listed on the exchange, which dates back to just prior to 1900, when it first started operating. Most importantly, the exchang...
The Shanghai Stock Exchange
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