Hong Kong Exchanges and Clearing Limited: Local Retail Investors Remain The Largest Contributors To Stock Market Turnover

A recent survey carried out by Hong Kong Exchanges and Clearing Limited (HKEx) shows that local retail investors remain the largest contributors to trading activities in the Hong Kong stock market. Their share in total market turnover increased from 45 per cent in the 12 months to September 1999 to 49 per cent for the same period in 2000. The remainder is shared among overseas institutional investors (28%), local institutional investors (18%), principal trading by stockbrokers (3%) and overseas individual investors (2%).

The Cash Market Transaction Survey also reveals that, as in previous years, the United Kingdom and the United States were the two largest sources of overseas stock investment. They represented 33 per cent and 23 per cent of overseas agency turnover in the study period, while Asian investors' share decreased slightly from 23 per cent to 21 per cent.

The survey also explored the popularity of Internet stock trading in Hong Kong. During the study period (October 1999 to September 2000), Internet trading only contributed 1 per cent of total agency trading. However, the study was conducted prior to the launch of the AMS/3, the Third Generation Automatic Order Matching and Execution System, which supports direct online trading.

The Transaction Survey has been conducted annually for a decade. During that time, local agency trading has contributed the majority of total market turnover (60 - 70 per cent). For the 2000 survey, questionnaires on transactions were sent to 481 trading participants of the Stock Exchange. The response rate was an excellent 99 per cent.

A full report of the Cash Market Transaction Survey 2000 is available on the HKEx website (http://www.hkex.com.hk/library/reports/Mem00.htm ).