Hong Kong Stock Exchange: What you Should Know
What is the Hong Kong Stock Exchange?
• The Hong Kong Stock Exchange (Symbol: HKEX) is the third largest stock exchange, in regards market to capitalization, ranking only behind the Tokyo Stock Exchange and the Shanghai Stock Exchange. As of January of 2011, the Hong Kong Stock Exchange has over 1,400 listed companies that possess a combined market capitalization of $2.7 trillion.
Brief History of the Hong Kong Stock Exchange:
• The history of the Hong Kong Stock Exchange began formally in 1891, though a series of informal securities exchanges can be dated back to the early 1860s. The Hong Kong Stock Exchange has primarily been the dominant exchange for Hong Kong despite existing alongside numbers other exchanges throughout its history. Following a series of complex mergers and acquisitions, the Hong Kong Stock Exchange remains the core marketplace for the trading of various companies.
Trading Hours and Characteristics of the Hong Kong Stock Exchange:
• The trading day in Hong Kong opens, in a pre-auction session, at 9:00 to 9:30 am. Following the preliminary auction process, the morning trading session lasts from 9:30 am to 12:00 pm. From 12:00 pm to 1:30 pm the market utilizes an extended morning session which is referred to as the lunch break. Continuous trading then proceeds until 4:00 pm. The opening price of a security listed on the Hong Kong Stock Exchange is first reported at 9:20 am; the closing price is then reported as the median of various price snapshots at 4:00 pm.
• The Hong Kong Stock Exchange utilizes a computer-assisted trading system known as the “Automatic Order Matching and Execution System”. It is considered normal for even well-known stocks listed on the Hong Kong Stock Exchange to trade at prices that correspond to less than $4 a share. A Hong Kong stock would not be labeled as a cheap or penny stock unless its price was less than roughly $.50 cents per share.
• Each individual stock listed on the Hong Kong Stock Exchange possesses its own board lot size; online brokers will typically display these slots along with the price when an investor receives a quote. All purchases that are ordered not in multiples of the board lot size are affirmed in a separate market known as the “odd lot market.” Furthermore, the Hong Kong Stock Exchange enforces a close-in-price rule for limit orders, which must be placed within 24 ticks of the current price. Brokers may impose stricter rules that require limit orders to be placed within 10 ticks of the current price listing.
What are some of the larger stocks listed on the Hong Kong Stock Exchange?
The largest stocks, in terms of market capitalization, listed on the Hong Kong Stock Exchange are as follows:
• PetroChina• Industrial & Commercial Bank of China• China Mobile• China Construction Bank• HSBC Holdings• Bank of China• Sinopec Corp• China Life Insurance• Chine Shenhua Energy• CNOOC• Standard Chartered
