Understanding Share in Hong Kong
Shares represent ownership in a company or corporation. When an individual or entity holds company shares, they effectively own a portion of that company. Shares are a way for companies to raise capital by selling ownership stakes to investors.
Types of Shares
There are various types of shares, each with its unique characteristics:
Ordinary Shares
These are the most common type of shares and typically carry voting rights in the company’s decision-making processes.
Preference Shares
Holders of preference shares are entitled to receive fixed dividends before ordinary shareholders. However, they usually don’t have voting rights.
Cumulative Preference Shares
If a company misses a dividend payment, it accumulates and must be paid in the future before paying any dividends to ordinary shareholders.
Non-Cumulative Preference Shares
Unlike cumulative preference shares, missed dividends do not accumulate, and preference shareholders may lose their entitlement to unpaid dividends.
Significance in Hong Kong
In Hong Kong, shares play a crucial role in the thriving business landscape. The Hong Kong Stock Exchange (HKEX) is one of the world’s leading stock markets, attracting investors and companies from around the globe. The issuance and trading of shares on HKEX enable companies to raise capital for growth and expansion, while investors can buy and sell shares to participate in these companies’ success.
In conclusion, shares represent ownership in a company and are categorised into various types with distinct characteristics. In Hong Kong, the stock market, facilitated by HKEX, is a vibrant platform for trading shares and plays a vital role in the region’s economy and business ecosystem.
