Hong Kong stock market was started in 1891. It is one of the most established stock markets in the world, classified by the International Finance Corporation (IFC) as a developed market.

In Hong Kong, there is a strong presence of the world's major financial institutions: 167 foreign banks including 85 of world's top 100 banks, 323 overseas securities and commodity trading companies, 122 overseas insurers, and 1,182 unit trusts and mutual funds.

Hong Kong has the second largest stock market in Asia and the 7th largest in the world. As at September 1995, Hong Kong market capitalization was over $403 billion. ``The territory continues to feature as a capital raising centre for China, with 17 H-share companies having been listed on the Stock Exchange of Hong Kong with market capitalization of $3.5 billion,'' the spokesman said.

In addition, multilateral agencies launched a total of 11 Hong Kong dollar bond issues in Hong Kong in the first three quarters of 1995, involving $455 million.

References for companies are available in English language.

Hong Kong is a free economy with well established laws for finance and commerce. Non-residents can efficiently trade stocks in Hong Kong.

Hong Kong's stock market is directly linked to the bullish China economy which has been growing at a rate of 8-13% during the last decade. There is an increasing number of major Chinese corporations offering stocks in Hong Kong (the H Share Companies).

Hong Kong dollar is internationally exchangeable at a very constant rate against US dollar (US$1=HK$7.73).

You can lookup exchange rates for HK$ for the day.

HK economic risk is ranked in the lowest category, less than 20 by the Economic Intelligence Unit.

HK has one of the highest GDP per capita at $24,000 (1994 estimate and growing at 5%) among emerging economies.

Hong Kong has just been ranked by Fortune magazine as the best city in the world to do business.

Some common practice in HK Stock market trading

(1) price position

    stock/warrant price (HK$)   0.010 -  0.249   ( .001 per increment)
                                0.250 -  0.495   ( .005 per increment)
                                0.50  -  1.99    ( .01  per increment)
                                2.00  -  4.975   ( .025 per increment)
                                5.0   - 29.95    ( .05  per increment)
                               30.0   - 49.9     ( .1   per increment)
                               50.0   - 99.75    ( .25  per increment)
                              100.0   -          ( .5   per increment)

(2) Ask / Bid quotes
    At most 5 positions from the most recent dealing price.
    i.e. if the most recent transaction for NWD was performed at a price of 
    $33.30, you can at most place your asking quote at $33.80, or a bidding
    quote at $32.80.

(3) Trading system 
    Extremely transparent. Orders are matched automatically without
    the intervention of a specialist or market maker.  Execution
    prices are currently disseminated via the datafeed in just over
    3 seconds.
    (Paul Chow, Chief Executive of the HKSE, Jan. 1996 issue of the 
    Securities Journal;  Speech at the Asia Pacific Issuers & Investors 
    Forum on December 5, 1995). 

(4) The brokerage and transaction cost are very low

    The brokerage/transaction cost consists of 4 parts:

    Brokerage : 0.2% - 0.5% (service charge given to the stock house)
       (depends on your business relationship with the broker.  
       Personal investors normally 0.3%).
       Minimum: HK $50.

    Contract Stamp : HK $1.50 per $1,000. of trade (duty given to HK Govt.)

    Transaction Levy : 0.013% (service charge given to the HKSE)

    Central clearing system settlement fee : $3.00 per trade, flat

    e.g. (some real record)

    Buying 1200 shares (3 lots) of HK TeleCom at $12.00.

    Qty.: 1,200
    Buying price : $12.00
    Gross amount :     $14,400
    Brokerage (0.03%) :    $43.20 => $50. (minimum charge)
    Contract stamp    :    $22.50
    Transaction levy  :     $1.87
    CCASS settlement  :     $3.00
         Total paid   :$14,477.37	(0.535% fee)

    Later sold at $12.20		(1.67%  price gain)

    Qty.: 1,200
    Selling price : $12.20
    Gross amount :     $14,640
    Brokerage (0.03%) :    $43.92 => $50. (minimum charge)
    Contract stamp    :    $22.50
    Transaction levy  :     $1.90
    CCASS settlement  :     $3.00
         Total rcv.   :$14,562.60

    Net profit : $85.23			(0.59% net gain)

(5) Settlement day : T + 2
    i.e. If you buy some stocks, you will receive the stocks 2 trading
    days later, AND you have to place the cheque on that day also.
    If you sell, you have to deliver the stocks 2 trading days later
    (either real stock in paper certificate form, or through CCASS
    computer system), and you will receive the cheque on that day.

    If you buy stock A and sell stock B on the SAME DAY, only the balance
    will have to be paid, or received.


(6) Index future

    [CAUTION: HIGH RISK]
    A spread of 5 points will normally be quoted. i.e. 9950 buy vs 9955 sell.

    A deposit of HK $40,000 - $60,000 per contract is required
    (again the amount depends on your business relationship with the broker).  
    profit/loss : HK $50. per HSI point

    If your floating loss is already more than 1/3 of your available margin
    deposit, then the broker will try to contact you asking for more
    margin deposit.  Failing to contract you, or you can't provide
    immediate cash injection, the broker may exercise his right (against
    depends on your business relation with the broker) in force
    settling your future contract, and you are still require to pay for
    loss (if any).

    Brokerage : $200 per contract (1 buy and 1 sell).
                This amount varies amongst brokers.
                For $200 of brokerage, this is equivalent to 4 HSI points,
                so in general a gain in 10 points will be able to cover the 
                spread and also the brokerage.