1. Analysis of Hong Kong Stock Market (Group 6) Student No. Student Name
Lam Kai Chiu, Andy
Ng Tim Ching, Jessica
Chong King, Queenie
Chan Hon Wah, Oscar
Cheung Ho Yee, Kelly
Ko Hoi Ling, Helen

2. Comparison of stock markets between Hong Kong and Shanghai

3. The value of turnover in Shanghai stock market from 1991 to 2002.

4. The value of transactions for stocks in Shanghai stock market

5. SWOT Analysis of Shanghai Stock Exchange (SSE)

6. Potentially a huge market Catching up effect
Strengthen
Potentially a huge market
Catching up effect

7. The comparison in number of companies listed in the stock markets

8. Potentially a huge market Catching up effect
Strengthen
Potentially a huge market
Catching up effect
Investors are better educated

9. The immature of the legal system
Weaknesses
The immature of the legal system
The apply of strict foreign exchange rules
Lengthy lock up periods for QFII

10. Opportunities
-In the past: foreign companies restricted to invest B shares.
-In 2002: QFII scheme is developed. Foreign companies is allowed to invest A shares after approved by CSRC.
-Now: the restriction of QFII scheme is reduced.

11. Opportunities China has a huge population (1.3 billion)
Large development potential
Foreign companies willing to invest to Shanghai rather than Hong Kong.

12. Opportunities
-Infrastructure in Shanghai is improving in recent years.
-one of the most efficient infrastructures among the stock markets in Asia
-More companies are willing to take part in Shanghai Stock Market to gain the profit.

13. Threats
-QFII restricted foreign companies invest to Shanghai Stock Market
-Restriction of the QFII scheme is benefit to the other Stock Market.

14. Threats Only Shanghai Stock Market is activated.
Other financial market is not well developed. Such as bond market.
Foreign can diversify their risks.
Foreign companies invest in Hong Kong instead of Shanghai.

15. The Development of Hong Kong Stock Market

16. Ranking of world markets by total equity funds raised (2004)

17. Market Capitalisation of the World's Top Stock Exchanges
(As at end June 2005)
世界各大證券交易所的市值 (截至2005年6月底)
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
Australia 澳洲 11
721
Northern Europe
(OMX Exchanges)
北歐(OMX交易所) 12
709
Italy
意大利 13
708
Korea 韓國 14
497
Taiwan 台灣 15
456
資料來源：全球證券交易所聯會/ World Federation of Exchanges

18. Market Capitalisation of the World's Top Stock Exchanges

19. - IPO by Mainland Co. s’ raised HKD 75.4 bn=79% of the total.
Hong Kong’s reunification with the Mainland  bridge/platform: Mainland World
Yr. 2004
- 304 Mainland China Co. listed in HK =28% of the total
- Buying and selling Mainland Co. s’ shares: HKD bn, 42% of the total turnover
- IPO by Mainland Co. s’ raised HKD 75.4 bn=79% of the total.

20. The influence of China on HK
The speed up of reforms in China
e.g. the enter of WTO in 2001
The capital inflows provoked by the RMB revaluation expectations
Encourage the overseas expansion  internationalization listing in HK is increasing

21. The influence of China on HK
The strengthening of China’s national and economic power in recent years
 accordingly benefit Hong Kong economy as well as stock market
( e.g. "individual visit" scheme in , CEPA in 2004,)

22. The possible trends in the long run
Hong Kong stock market may be dominated by China shares
∵The integration of economy between HK and China
Hong Kong stock market may face competition from China as well as the international stock exchange

23. How HK maintain its strengths?
Try to attract foreign capital by promoting to further deepen and broaden the financial market
Enhance the quality of corporate governance to boost up the confidence among investors

24. How HK maintain its strengths?
Maintain a transparent regulatory regime of international standard to ensure quality
Attract and train the talented people to participate in the finance industry

25. Challenges
Hong Kong has only a limited number of companies that can be listed in HKSE
maturity of Hong Kong's economy and markets
growth potential of HKSE could be restricted
worry that China shares will one day dominate Hong Kong's stock market.

26. Little liquidity of GEM
Challenges
Little liquidity of GEM
the H.K. GEM with an overall turnover of only HK$18.68 billion in the first ten months of 2005
quality of listed companies in the GEM segment
80% of stocks are trading below their IPO price

27. Challenges
Marketplace’s reputation Investors criticize the listing authority system at the HKSE and
conflict of interests of HKEx
profit organization
has a strong interest in listing companies regardless of the quality of the listings

28. Challenges
Hong Kong might face is the direct competition from both China and the other international stock exchanges
main capital raising market for enterprises in China

29. Challenges
largely accomplishes the market-based reforms and capital market in China
In the long run, Hong Kong's stock market may be dominated by China shares

30. Challenges Uncertain political future
strong demand for political reform in Hong Kong
Governments of Hong Kong and Beijing resisted and don’t show any idea about the political reform agenda
“one country two systems” unchanged for 50 years
unforeseeable future in Hong Kong

31. Conclusion
Best places in the world to invest and to carry out business
well established legal system, infrastructure, economic policy and favorable geographical location
With the access to World Trade Organization and opening to the overseas markets

32. Conclusion Financial development of Hong Kong stock market
short run: it brings great and numerous business opportunities to the Hong Kong’s financial sector => thus the overall financial development of Hong Kong stock market

33. Conclusion Comparative advantages Potential threat of Hong Kong
competition from Shanghai’s as well as the international stock exchanges
Comparative advantages
liberal economic policy, free flow of information and capital, low taxation, stable currency linked with Us dollar, sound legal system, etc

34. Future of the Hong Kong’s position
Conclusion
Future of the Hong Kong’s position
continue to improving by further upgrading our market structure and framework
maintain the comparative advantage and move ahead.

35. M. C. Questions
At the end June 2005, Hong Kong's stock market capitalization ranked number ___ of the world's stock exchanges. 3 6 9 12

36. M. C. Questions
Which stock market have we compare with Hong Kong Stock Exchange?
Singapore stock market
Shanghai stock market
Japan stock market
None of above

37. M. C. Questions
Which challenge(s) we have mention in the presentation?
Little liquidity of GEM
direct competition from both China and the other international stock exchanges
Uncertain political future
All of above