The situation of Hong Kong Securities Market

Hong Kong is a well-known financial centre in the world, as at 31 December, 2016, 1,973 corporations listed its shares in the main board or Growth Enterprise Market in Hong Kong Exchange and Clearing Limited (HKEx), the total market capitalization was over HKD25 trillion, ranked at 3 in the Asia behind Tokyo and Shanghai. Strict regulation, open investment channel and no foreign exchange control, it makes investors to conduct their investments activities without barrier. As the Chinese economy continues to surge ahead, many enterprises established in mainland China seeks capital formation in Hong Kong, in recent years, some enterprises located in Italy, Russia and Kazakhstan listed its shares sequentially in HKEx. By the way, Cross-border trading scheme lunnched in 2014 and expand with Shenzhen connect in 2016, Hong Kong has been a very important securities market not only in Asia but also in the World.

The Hong Kong Stock market

There are two markets namely Main Board and Growth Enterprise Market (GEM) in The Stock Exchange of Hong Kong Limited.

Main Board – it is a market for capital formation by established with a track record of profit with certain scale, and has satisfied with the requirement of authority. Equities, equity warrants, debts, structured products, Exchange trade funds (ETF) and other unit trust / mutual funds are the products trading on the main board.

GEM Board- it is a secondary market, which provides a channel to different industries in any scale for capital formation. On the GEM board, products type is mainly consist of securities and security warrants.

Stock Category

Securities include ordinary shares and preference share, most of the listed shares in Hong Kong market is ordinary shares. According to its character, shares are classified as blue chip, red chip, Chinese corporates’ shares, ETF and even purple chip.

Hang Seng Index

The Hang Seng Index (“HSI”) is a benchmark to reflect the price movement of Hong Kong stock, it measures the performance of largest and most liquid companies listed in Hong Kong. The Hang Seng Indexes limited is responsible for the calculation and review quarterly of the Hang Seng family of indexes, furthermore, the constituent stocks can be adjusted by the company in order to reflect actually the status of the market. The constituent stock includes difference kind of industries, according to the nature, there are four sub-indexes set up, it includes Finance, Utilities, Properties together with Commerce and Industry, and then the China Enterprises index, China-affiliated Corporations index, Volatility index and leverage index provided sequentially. The indexes can assist the investor to make a suitable decision.

Trading system

Currently, AMS/3 system is being used by The Stock Exchange of Hong Kong Limited, intermediary’s system can be directly made the communication with the AMS/3 system and it supports multi-market conducting real-time transaction. The stock trading is completed by the method of auto marching through the AMS/3 system.