Hong Kong Exchanges and Clearing

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Hong Kong Exchanges and Clearing Limited
Type	public company
Founded	2000
Headquarters	Exchange Square, Central, Hong Kong, Hong Kong
Key people	Ronald Arculli (Chairman)
Industry	Financial Services
Services	Shares, futures & options Trading
Divisions	Hong Kong Stock Exchange, Hong Kong Futures Exchange, Hong Kong Securities Clearing Company
Website	hkex.com.hk

Exchange Hall

Hong Kong Exchanges and Clearing Limited (Chinese: 香港交易及結算所有限公司, also 香港交易所 or 港交所; abbreviated as HKEx; SEHK: 0388) is the stock exchange of Hong Kong. HKEx is the holding company for The Stock Exchange of Hong Kong Limited (SEHK), Hong Kong Futures Exchange Limited (HKFE) and Hong Kong Securities Clearing Company Limited. With a total market capitalization of over US$2.124 trillion as of as at July 12 2007, the HKEx ranks fifth in the world by market capitalization of listed companies (see List of stock exchanges for complete rankings).

1 History
2 Operations
- 2.1 Infrastructure
- 2.2 Trading Hours
3 See also
4 References
5 External links

[edit] 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^[1]. 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 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)

(1914) Renamed to Hong Kong Stock Exchange

(1947) A merger is made after World War II with Hong Kong Stock Exchange retaining the name

Hong Kong Stockbrokers Association (Founded 1921)

Hong Kong Stockholders Association Ltd (Founded 1978) allow info sharing between HKSE and other exchanges

Far East Exchange Ltd (Founded 1969)

Kam Ngan Stock Exchange Ltd (Founded 1971)

Kowloon Stock Exchange Ltd (Founded 1972)

(1986) HKSE merges with other exchanges and retain the name but also presented as Stock Exchange of Hong Kong

(2000) Hong Kong Exchanges and Clearing becomes the holding company for Hong Kong Stock Exchange

Hong Kong Futures Exchange Ltd (Founded 1976)

Hong Kong Securities Clearing Company Ltd (Founded 1989)

HKEx was formed in March 6, 2000 by a merger of its three main constituent companies. The company itself is listed on its own exchange, the HKSE.

The Hong Kong Government is the single largest shareholder in HKEx, and has the right to appoint six of the thirteen directors to the Board.

[edit] Valuation

As at September 2005, the stock exchange had a market capitalization of HK$ 7,544 million (US$ 967mn), making it the second-largest stock exchange in the Asia Pacific region after Japan.

As at 2006, with a total market capitalization of more than HK$10 trillion (US$1.3 trillion), the Hong Kong Stock Exchange ranks 8th in the world by market capitalization of listed companies.^[2] As at July 12 2007, the Hong Kong Stock Exchange ranks fifth in the world, with a total market capitalization of over US$2.124 trillion

[edit] Merger speculation

After the New York Stock Exchange announced in November 2006 that it would open an office in Beijing to work with the Shanghai Stock Exchange, Hong Kong Exchanges and Clearing chairman Ronald Arculli dampened speculation saying it has no immediate plans to acquire or merge with other exchanges, but would focus on "strengthening our competitiveness and reviewing our listing fees."^[3]

[edit] Government share purchase

In September 2007, the government revealed that it had increased its stake from 4.41 percent to 5.88 percent. According to market sources, the Government spent HK$2.44 billion to buy 15.72 million shares in the company. The stake would be held by the Exchange Fund as a "strategic asset".^[4].

The move has drawn widespread criticism in Hong Kong and abroad: David Webb said that the government was the second-largest single investor in the Hong Kong market after Beijing, with a portfolio of local equities estimated to be worth about HK$150 billion. He said the purchase violated the government's stated principle of "big market, small government", adding that it increased uncertainty and sends a very negative signal to the market as a whole;^[5] the Civic Party criticised the Government for damaging public confidence in the capital market, and interfering with the stock exchange's independence; A Wall Street Journal editorial said that the Hong Kong Government is further interfering in the market to "cozy up to China's tightly controlled domestic exchanges". ^[6] Financial commentator Jake van der Kamp stated that the Financial Secretary is caught in a conundrum: The government's interest in increasing the efficiency of the marketplace conflicts with its role as a shareholder, who would prefer as high return as possible.^[7]

The Government said that it wanted to play a positive role in the stock exchange's development as a shareholder. Analysts expect the Government will continue to increase its stake, as HKEx is being prepared "for future integration and alliance with mainland exchanges". Another analyst was concerned about the independence of "Independent Chairman" Ronald Arculli, who also sits on the Executive Council.^[5]

[edit] Operations

[edit] Infrastructure

Computers were integrated on April 2, 1986, which has helped modernize the system^[8]. 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^[9]. Systems as such were added to meet the increased popularity of online Stock trading.

[edit] Trading Hours

The Exchange Exhibitation Hall

From 10:00am to 12:30pm and from 2:30pm to 4:00pm (From 9:00pm to 11:30pm and from 1:30am to 3:00am New York Standard (EST) time)

[edit] See also

[edit] References

^ HKedu. "HKU." Hong Kong U. Retrieved on 2007-02-15.
^ English.people.com.cn
^ Olivia Chung, Arculli maintains HKEx has no merger plans, The Standard, December 02, 2006
^ Benjamin Scent, Exchange Fund boosts stake in HKEx, The Standard, September 08, 2007
^ ^a ^b Benjamin Scent, Exchange face-off, The Standard, September 11, 2007
^ Katherine Ng, [Move to boost HKEx stake was `not intervention'], The Standard, September 12, 2007
^ Jake van der Kamp, To be world-class, the HK exchange needs to cut fees, Monitor, South China Morning Post, September 18, 2007
^ HKEX. "HKEX." History of HK exchange. Retrieved on 2007-02-11.
^ ADVFN. "ADVFN." History of the Hong Kong stock exchange. Retrieved on 2007-02-11.