Hong Kong Exchanges and Clearing

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Hong Kong Exchanges and Clearing
image:HKE_logo.gif
Founded 2000
Headquarters Hong Kong
Key People Paul Chow, CEO; Gerald Greiner, COO; Calvin Tai, head of derivatives; Eric Yip, head of cash markets; Ronald Arculli, chairman
Products Cash equities, bonds and ETFs; futures and options in equity indexes and single stocks, and interest-rate futures
Web site http://www.hkex.com.hk/index.htm

Hong Kong Exchanges and Clearing (HKEx) was created in 2000 as the holding company for the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange (HKFE) and Hong Kong Securities Clearing, which provide an electronic platform for the trading, settlement and clearing of securities and derivatives.

HKEx, which listed on its own board in 2000, is the third-largest stock exchange in Asia - hosting the benchmark Hang Seng Index - and the 10th-largest globally in 2007[1]. Its derivatives platform ranked 33rd worldwide in 2006, though volume more than doubled to 89 million contracts in 2007.[2]

Contents

Structure and Regulation

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HKEx reported net profits of HK$2.52 billion on revenues of HK$4.15 billion in calendar 2006, with income derived primarily from the cash market, where volumes - which doubled in 2007 - have been driven by the listing of China H-Shares.[3]. The main board listed 975 companies as of Dec. 31, 2006, while the Growth Enterprise Market - launched in 1999.

Product Development

The HKFE started with Hang Seng Index futures, adding options in 1993, while the stock exchange launched equity options in September 1995.

Futures and options volumes climbed from 9.3 million contracts in 2000 to 90 million in 2007.[4]

As of Jan. 9, 2008, the futures exchange listed futures and options on the following equity indexes: FTSE/Xinhua China 25; Hang Seng China H-Financials; Hang Seng Index; H-Shares; and the Mini-Hang Seng. It also listed 43 single-stock futures and 47 stock options, as well as Hibor futures and three-year exchange fund note futures.

Hang Seng Index futures are the largest single product, with 17.2 million traded in 2007, while stock options volumes climbed to 47 million.



Trading Hours

Trading hours are from 9:45 a.m. - 12:30 p.m. and 2:30 p.m. - 4:15 p.m.

History

The HKEx was formed on March 6, 2000, following an initiative by the Hong Kong administration to reform the securities and futures markets to improve their global competitiveness. The member-controlled Stock Exchange of Hong Kong Limited and Hong Kong Futures Exchange Limited were demutualized and combined with Hong Kong Securities Clearing Company Limited into a single holding company, which was listed on the stock exchange on June 27, 2000.[5]

The stock exchange traces its roots to the Association of Stockbrokers in Hong Kong, established in 1891 and re-named the Hong Kong Stock Exchange (HKSE) in 1914. A second exchange, the Hong Kong Stockbrokers' Association was incorporated in 1921 and merged into the HKSE in 1947. Three more bourses followed - the Far East Exchange in 1969; the Kam Ngan Stock Exchange in 1971; and the Kowloon Stock Exchange in 1972 – which were later merged with the HKSE to form the Stock Exchange of Hong Kong Limited, which started operations on March 27, 1986.

The Hong Kong Futures Exchange was established in December 1976 as the Hong Kong Commodities Exchange, changing its name in 1985. The exchange initially traded Hang Seng Index futures using open outcry, with clearing and settlement from the wholly-owned HKFR Clearing Corporation. Options were added in 1993, with automated trading launched in November 1995. The trading floor was closed in 1999.[6]

The Hong Kong Securities Clearing Company Limited was incorporated in 1989 and started operations in 1992. The HKEx listing was underwritten by HSBC, Merrill Lynch and Morgan Stanley.

In September of 2004, China Securities Depository and Clearing Corporation (SD&C) and Hong Kong Securities Clearing Company (HKSCC) announced they had signed a Memorandum of Understanding (MOU) on information and personnel exchange. Goals of the MOU included facilitating the exploration of substantive joint projects, improving the two parties' clearing systems, developing secure and highly efficient clearing structures and managing clearing risks.


References

  1. ↑ 2007 Market Highlights. WFE. Retrieved on February 11, 2008.
  2. ↑ Volume growth accelerates. FIA. Retrieved on January 9, 2008.
  3. ↑ Annual Report. HKEx. Retrieved on January 9, 2008.
  4. ↑ Statiostics. HKEx. Retrieved on January 9, 2008.
  5. ↑ Official history. HKEx. Retrieved on January 9, 2008.
  6. ↑ Speech by Geoffrey Yeh, chairman. HKFE. Retrieved on January 9, 2008.
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