Hong Kong Stock Exchange (HKEX) – A Quick Guide

 

Hong Kong Stock Exchange (HKEX)An Overview of The World’s Learning Financial Market Operator

The Hong Kong Stock Exchange (HKEX) is the fourth largest stock exchange market globally. With a hub in Hong Kong and a base in London, HKEX is a dominant force.

 

Growing Fast in Asia

2,314 companies are listed on the HKEX as of 2018. Since it was officially set up in 1891, it has grown exponentially together with Hong Kong’s reputation as a leading financial hub in Asia. When it was first established, it was known as the Association of Stockbrokers in Hong Kong. Later, it was renamed the HKEX in 1914.

It’s well renowned for its world-class facilities, among others which include the clearing of derivatives and securities in:

  • Commodities
  • Currency
  • Equities
  • Fixed income

Part of the HKEX’s mission is to promote and help progress the local financial markets. This includes the communities which are supported by the exchange. The exchange values collaboration, integrity, diversity, excellence and engagement

 

Connecting China Globally

HKEX capitalises on its unique position at the Chinese and international capital flow intersection. For a long time, the stock exchange has been connecting China to the rest of the world. It continues to pioneer the forefront of this transition, and the stock exchange believes that this is reshaping what the global market landscape looks like.

It plans to achieve this outcome through its 2019-2021 Connecting China, Connecting the World Strategic Plan. To find out more about the plan, click here.

 

The Big 3

The HKEX has three major markets:

  • The Hong Kong Stock Exchange Market – Its iconic securities market is home to 2,315 companies as of 31 December 2019. This market has been the number one global IPO venue for the last 6 out of 10 years. As of 31 December 2018, the securities market recorded a total market cap of $29.9 trillion.
  • The Hong Kong Futures Exchange – This multi-class derivatives exchange has 296 million contracts traded as of FY 2018. Its record high was 1.76 million in traded USD/CNH Futures totalling US$73.3 billion. Between FY 2000-2018, this exchange has experienced an annual volume growth of 21.3%.
  • The London Metal Exchange – This world centre for trading industrial metals has 34 global delivery locations, as of 31 December 2018. As of FY 2018, this exchange has an impressive 185 million in traded annual lots, and 4.1 billion in annual tonnes traded.

Hong Kong Stock Exchange (HKEX)

 

A Normal Trading Day

A normal trading day on the HKEX begins with its pre-opening auction. The auction opens at 9am and goes on for 30-minutes. From 9.30am onwards, the morning continues with its regular trading sessions, which ends sometime at noon. Lunch breaks are referred to as “extended morning sessions”, which run from noon to 1pm.

After the lunch break, the rest of the day continues to progress. However, the focus will be on specifically-designated securities only. You won’t be able to trade in other securities this time. Any orders in securities which were placed previously can be cancelled from 1pm onwards.

On 2 April 1986, HKEX introduced the very first trading system which was computer-assisted. By 1993, the Automatic Order Matching and Execution System (AMS) was launched. It was later replaced in October 2000 by the third generation AMS system.

For more information about the stock exchange, visit its website by clicking here.