1. Financial Institutions In Hong Kong
The Prospectus Of The
Hong Kong Stock Market

2. Development of Hong Kong Stock Exchanges
The association of stockbrokers in 1891 which was the First formally recognized stock market in Hong Kong
The organization became the Hong Kong Stock Exchange in 1914
The Second exchange, the Hong Kong Stockbrokers’ Association was incorporated in 1921 and merged with the Hong Kong Stock Exchange after World War II in 1947
The merged organization was called the Hong Kong Stock Exchange
Tiffany

3. After World War, formation of Three other exchange:
Far East Exchange (established in 1969)
Kam Ngan Exchange (established in 1971)
Kowloon Exchange (established in 1972)
In 1980, the Four exchanges were merged into a Single entity known as the Stock Exchange of Hong Kong Ltd
The Four single exchanges ceased trading individually on 27 March 1986 and the new exchange commenced trading via a computer-facilitated system on 2 April 1986
Tiffany

4. HKEx is now a listed campany on the SEHK
In 1999, the Hong Kong Financial Secretary announced significant market reforms for the securities and futures markets
To facilitate the process of reform, the Stock Exchange of Hong Kong Ltd and Hong Kong Futures Exchange Ltd demutualized and, in conjunction with the Hong Kong Securities Clearing Company merged on 6 March 2000 to form a New holding company, Hong Kong Exchanges and Clearing Ltd
HKEx is now a listed campany on the SEHK
Tiffany

5. Stock classification Blue chips Red chips H shares Others
Red chips, H shares China-aff Stocks
At 2005 206
Jason

6. Main Board
In 2004, the market capitalization was HK $6,629, million.
Number of Shares:892
Jason

7. GEM Board
In 2004, the market capitalization was HK $66, million.
Number of Shares:204
Jason

8. Market capitalization
HSBC HOLDINGS (Main Board)
HK $1,485, million
Tom online (GEM Board)
HK $ 8,200.9 million
Jason

9. Market capitalization
HSBC HOLDINGS =181 Tom online
HSBC HOLDINGS =22 Gem Board
Gem Board is relatively small
Jason

10. The market capitalization of Hong Kong Stock market
Comparison with the past data
Comparison with other countries
Kenneth

11. Comparison with the past data
FROM 1970 – 2004
Kenneth

12. Comparison with the past data
The past data of the main board
The highest day : 28/8/1998 trading value --- HK$79,002.61M
The lowest day : 9/6/1970 trading value --- HK$6.15M
Kenneth

13. Comparison with the past data
The past data of the main board
The highest whole year trading value : 2004 HK$3,948,350.84M
The second highest whole year trading value : 1997 HK$3,788,959.79M
Kenneth

14. Comparison with the past data
The securities market of Hong Kong was growing from 1970 to 2004
Average daily trading value : HK$20.6M HK$15,856.83
Kenneth

15. Comparison with the past data
Some main event through 1970 – 2004
Example : 1997 Asia financial crisis - a suddenly drop of trading value from HK$3,788,959.79M (1997) (1998) HK$1,701,112.01M
Kenneth

16. Comparison with the past data
An increasing influence of listings of Mainland enterprises in Hong Kong
The first Mainland enterprises listing in HK : 青島啤酒 (0168) --- 7/1993
The China factor, including China Aff Shares and the H shares, becoming very important to the HK market
Kenneth

17. Comparison with the past data
To the end of 2004
The number of Mainland enterprises listing in HK : % of the HK stock market
The total market capitalization : over HK$2,020,500M 30% of the HK stock market
The whole year trading value : over HK$1,665,100M 42% of the HK stock market
Occupy 8 of the Top 10 HK IPO
In the history of HK stock market, all of the Top 10 IPO was Mainland enterprises
Source :
Kenneth

18. Comparison with other countries
As at end June 2005
Hong Kong’s Stock Market ranking in Asia is the second
Ninth in the Worldwide ranking
the market capitalization is US$895 billion
Kenneth

19. Table A - Market Capitalisation of the World's Top Stock Exchanges (As at end June 2005)
Worldwide Ranking
世界排名
Ranking in Asia
亞洲排名
Market Capitalisation (US$ billion)
市值 (以10億美元計)
US (NYSE)
美國 (紐約證券交易所) 1
12,865
Japan (Tokyo)
日本 (東京) 2
3,394
US (Nasdaq)
美國 (納斯達克) 3
3,388
UK (London)
英國 (倫敦) 4
2,734
Euronext 5
2,286
Canada (Toronto)
加拿大 (多倫多) 6
1,239
Germany
(Deutsche Börse) 德國
(證券及衍生工具交易所) 7
1,120
Spain
西班牙 8
920
Hong Kong 香港 9
895
Switzerland 瑞士 10
798
資料來源：全球證券交易所聯會
Kenneth

20. Forecast More and More China-aff Stocks
Motive power for the HK Stock market
Kenneth

21. The influence of the China Aff stocks
high economic growth rate of the China
the Mainland enterprises & China Aff shares directly benefited
Trend :
increasing number of Mainland enterprises applying for listing in HK
Increasing value of market capitalization
zoe

22. The market capitalization
Statistics on China enterprises (H shares)( )
Market
capitalization
Year
HK $Billion
% of equity total
2000
85.1
1.78
2001
99.8
2.57
2002
129.2
3.63
2003
403.1
7.35
2004
455.1
6.67
2005
1173.3
16.68
zoe

23. The market capitalization
Statistics on red chips stocks ( )
Market
capitalization
Year
HK$ Billion
% of equity total
2000
1203.5
25.1
2001
908.8
23.39
2002
806.4
22.66
2003
1197.7
21.67
2004
1409.3
21.26
2005
1758.9
23.32
zoe

24. Why was this happen?
成報  ( )
zoe

25. Why was this happen? 國家外匯管理局 今年1月及4月發布了「11號」及「29號」通知 規條繁雜的通知書
令內地的紅籌股上市大減
今年10月21日發布的「75號」通知
使外資公司紅籌上市申請條件及程序明朗化
zoe

26. Equities Funds Raised HK$Million Year 1993-2004
Total Equities Funds Raised By All Stocks
Total Equities Funds Raised By the China-Aff Stocks
over 43% of the Equities Funds Raised at Main board and the Gem board are occupied by the China-Aff Stocks.
zoe

27. Funds raised by IPO
Main Board
Gem Board
Henry

28. Funds raised by IPO in Main Board
Year 2005 (up to 28th October 2005)
Henry

29. Funds raised by IPO in Main Board
Henry

30. Funds raised by IPO in Main Board
Henry

31. Funds raised by IPO in Main Board
Total funds raised is $136,543,877,070
Henry

32. Funds raised by IPO in Main Board
Total Funds Raised by H shares is $131,253,961,730
上海電氣集團股份有限公司－Ｈ股 28/04/05 $ 5,053,950,400
中國神華能源股份有限公司－Ｈ股 15/06/05 $25,489,368,750
交通銀行股份有限公司－Ｈ股 /06/05 $16,834,925,000
中國遠洋控股股份有限公司－Ｈ股 30/06/05 $ 9,537,000,000
廣州富力地產股份有限公司－Ｈ股 14/07/05 $ 2,284,357,680
廣東南粵物流股份有限公司－Ｈ股 26/10/05 $ ,100,000
中國建設銀行股份有限公司－Ｈ股 27/10/05 $71,578,259,900
Henry

33. Funds raised by IPO in Gem Board
Year 2005 (up to 13rd October 2005)
Total funds raised is $550,291,100
Henry

34. Funds raised by IPO in Gem Board
Total Funds Raised by H shares is $132,691,100
上海楝華石油化工股份有限公司
13/07/05 $54,590,000
深圳市海王英特龍生物技術股份有限公司
12/09/05 $78,101,100
Henry

35. Funds raised by IPO
Total funds raided by IPO in the Main board and Gem board are $137,094,168,170
Total funds raised by China enterprises (H shares) is $121,574,261,330 which occupied 88.6% of the total funds
Henry

36. Funds raised by IPO Ranking of China-Aff stocks raised funds by IPO 1
Listed time
Funds raised from IPO
Stock name 1
27/10/05
建設銀行 (939)
$62,241,968,400 2
22/06/00
中國聯通 (762)
$43,607,699,091 3
23/10/97
中國移動 (941)
$32,665,054,560 4
18/12/03
中國人壽 (2628)
$26,713,818,250 5
19/10/00
中國石油化工股份 (386)
$26,680,975,920 6
15/06/05
中國神華 (1088)
$25,489,368,750 7
07/04/00
中國石油股份 (857)
$21,213,185,920
Henry

37. Trading Value 10 most active stocks in dollars in 2004:
China-Aff stocks occupied 6 of them (3,4,6,8,9,10)
Henry

38. Trading Value The statistics for the trading value in 2004:
Trading value of Red chips stocks and H shares occupied 45% of the whole
Total trading value on Gem and Main Board (HK$mil)
$3,422,929
Red chips stocks and H shares trading value (HK$mil)
$1,555,812
Percentage occupied
45%
Henry

39. China-Aff share’s position
Total funds raised by China enterprises (H shares) is $121,574,261,330 which occupied 88.6% of the total funds
China-Aff stocks occupied 5 in 10 of the most active stocks
Trading value of Red chips stocks and H shares occupied 45% of the whole stock market
China-Aff stocks show their important position in the stock market of Hong Kong
Henry

40. What is the role of Hong Kong Stock Exchange ?
Anthony

41. Opportunity
Direct
Indirect
Anthony

42. Direct Standard system and supervision
Recognition of Hong Kong Stock Exchange
Congenital advantages of Hong Kong
Anthony

43. 1.)Standard system and supervision (direct)
International-based
follows:
the instruction of international accounting system
rule of business administration
more confidence
Anthony

44. 2.)Recognition of Hong Kong Stock Exchange (direct)
globally function
price
powerful financing and re-financing
Anthony

45. 3.)Congenital advantages of Hong Kong (direct)
close relationship
close distance
close culture
China
Anthony

46. Indirect Consideration of financial safety in China
Non-stop economic growth in China
Anthony

47. 1.)Consideration of financial safety in China (Indirect)
not well-developed financial system
depends mainly on the banking system(人民銀行)
99% financing from banks in the 1st term
high risk and pressure on banking system
Hong Kong’s total market value relative to GDP %
China <30%; USA and England<100%
risk sharing by international investors
Anthony

48. 2.)Non-stop economic growth in China
9% growth rate in recent 3 years
demand of financing
need time to wait for the improvement and restructuring of financial system of China
impossible to wait
Anthony

49. The End

50. Q&A

51. (d) Hong Kong Exchanges and Clearing Ltd (e) Hong Kong Stock Exchange
1.) Stock Exchange of Hong Kong Ltd is formed by four exchange. Which of the following is not one of them?
(a) Kam Ngan Exchange
(b) Kowloon Exchange
(c) Far East Exchange
(d) Hong Kong Exchanges and Clearing Ltd
(e) Hong Kong Stock Exchange

52. 2.) Which of the following(s) is/are the China-aff Stocks?
(a) H Shares
(b) Red Chips
(c) Blue Chips
(d) A and B are true
(e) All of the above

53. (a) Standard system and supervision (b) Close relationship with China
3.) Which one is the advantage of Hong Kong for the development of financial system?
(a) Standard system and supervision
(b) Close relationship with China
(c) Close distance with China
(d) Close culture with China
(e) All of the above

54. Group Members: Lam Shuk Yee Zoe (033087) Chiang Ho Wang Jason (033098)
Lui Ka Fai Anthony (033100)
Cheng Hang Lee Henry (033101)
Yan Wai Man Tiffany (033103)
Chan Ka Shu Kenneth (033183)