HK Economic and Trade Office & HK Association in New York Luncheon Hong Kong’s Financial Markets: Positioning in the Asia Pacific region Mr. Andrew Sheng Chairman Securities and Futures Commission 29 October 2004 1
Largest Market in Asia-ex-Japan ♦ Stock Market: Market cap at US$741.3 bn as of end Aug 2004 – the largest stock market in Asia-ex-Japan ♦ Derivatives Market: 14.5 mn contracts traded in 2003 (11 mn contracts in 2002) ♦ For the 12 months ending Sep 2003, Institutional investors accounted for 58% of the turnover Overseas investors accounted for 39% of the turnover ♦ 1,077 companies listed on HKEx at end Aug 2004 ♦ Major fund raising centre for Mainland enterprises ♦ Securities market supported by highest concentration of international legal and accounting firms in Asia 2
Hong Kong – the Largest Market in Asia-ex-Japan (US$ bn) 800 end 1988 10.0x end 2000 700 end 2001 N/A 4.3x 600 end 2002 end 2003 500 end Aug 2004 3.1x 400 3.4x 300 200 7.9x 100 0 China Hong Kong Australia Taiwan Korea Singapore Remark: x = increase from end 1988 to end Aug 2004 3 Sources : WFE and IFC
Market Capitalisation by Sector (%) (Main Board) End 1996 End Aug 2004 (Total market cap: HK$3,476.0 bn) (Total market cap: HK$5,720.4 bn) Properties Consolidated Utilities Consolidated Utilities Miscellaneous 12.1% enterprises 6.9% enterprises Properties 10.3% 25.9% 0.2% 27.5% 31.0% Finance Industrials Miscellaneous 23.2% Hotels 15.9% Finance Industrials 0.3% Hotels 0.7% 36.8% 7.3% 2.0% Source : HKEx 4
Capitalization and Turnover of Major Markets (end Aug 2004, US$ bn) Market change over Market change over P/E Cap Aug 03 Turnover Aug 03 ratio Australia 597 26.4% 466 42.1% 23 China 472 -3.2% 499 45.0% 25 Hong Kong 741 25.1% 425 104.3% 18 India 246 37.9% 272 133.5% n.a. Indonesia 55 31.4% 23 112.6% 7 Japan 3,240 26.6% 3,206 97.7% 17 Korea 320 19.4% 496 11.5% 12 Malaysia 172 12.8% 68 101.9% 15 Philippines 25 19.5% 4 72.2% 14 Singapore 191 47.1% 116 79.2% 18 Taiwan 366 10.7% 737 31.8% 15 Thailand 97 36.0% 146 202.8% 9 Germany 961 14.4% 1,540 34.3% 22 UK 2,407 19.9% 4,782 38.4% 15 US (NYSE) 11,700 14.4% 11,017 17.0% 18 US (Nasdaq) 2,647 -0.9% 8,445 33.3% 46 Remarks: Turnover - for the 12 months ending Aug 2004, P/E ratio - end Aug 2004 P/E ratio for China is the weighted average of A and B shares markets Data for India includes only those from National Stock Exchange of India Limited 5 Sources: WFE and websites of various exchanges
Hang Seng Index 10000 12000 14000 16000 18000 2000 4000 6000 8000 0 Jun-97 Nov-97 HSI and Turnover Rebounded Apr-98 Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Hang Seng Index Market Turnover Nov-02 Apr-03 Sep-03 Feb-04 Jul-04 0 100 200 300 400 500 600 700 Market Turnover (HK$ bn) 6
Turnover by Stock Type Compared to Aug 2003, turnover of stock types in Aug 2004 ♦ increased/decreased HSI: 12.4% H-shares: +2.0% 3,000 Red chips: -27.8% Average Daily Turnover (US$ mn) HSI H-shares Red chips Others Others: -18.8% 809 2,500 813 2,000 539 656 644 476 506 426 1,500 617 425 502 326 481 458 473 447 323 384 878 288 422 1,000 243 344 308 210 292 557 625 422 526 197 436 699 308 256 415 328 302 360 500 791 667 669 590 605 614 575 560 498 500 476 390 401 0 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jul-04 Aug-04 Remark: Where a company belongs to both HSI and red chips, it is classified into red chips 7 Source: HKEx
Mainland Share of Hong Kong Market Rising 1996 1997 1998 1999 2000 2001 2002 2003 2004 Aug Number of Listed Companies (period end) Total (Main Board + GEM) 583 658 680 708 790 867 978 1,037 1,077 Mainland enterprises 69 98 104 112 119 127 146 164 181 - H-shares 23 39 41 44 50 58 74 92 105 - Red chips 46 59 63 68 69 69 72 72 76 Market Capitalisation (period end, HK$ bn) Total (Main Board + GEM) 3,476.00 3,202.30 2,661.70 4,734.70 4,862.50 3,946.30 3,611.30 5,547.80 5,782.00 Mainland enterprises 294.8 521.6 368.5 1,000.10 1,290.50 1,011.60 938.8 1,606.00 1,554.85 - H-shares 31.5 48.6 33.5 41.9 86.1 101.7 131.6 408.2 401.335 - Red chips 263.3 473 335 958.2 1,204.40 909.9 807.2 1,197.80 1,153.52 Market Turnover (12 months ending, HK$ bn) Total (Main Board + GEM) 1,412.20 3,789.00 1,701.00 1,919.50 3,131.80 1,989.50 1,643.10 2,583.80 3,785.57 Mainland enterprises 160.3 1341.5 442.9 458.3 846.9 749.2 453.3 1,000.40 1,595.30 - H-shares 24.9 297.8 73.5 102.8 171.2 251.4 143.6 506.1 933.3 - Red chips 135.4 1,043.70 369.4 355.5 675.7 497.8 309.7 494.3 662.0 By market cap, Mainland enterprises were 27% of the total ♦ By turnover, Mainland enterprises were 42% of the total ♦ Source: HKEx 8
Index and P/E of H-share index still below historical high levels 8,000 40 H-share Index P/E Ratio 7,000 35 6,000 30 5,000 25 4,000 20 3,000 15 2,000 10 1,000 5 0 0 01/94 07/94 01/95 07/95 01/96 07/96 01/97 07/97 01/98 07/98 01/99 07/99 01/00 07/00 01/01 07/01 01/02 07/02 01/03 07/03 01/04 07/04 Remark: P/E ratio prior to Aug 1994 was not available. Sources: CEIC, HSI Services, Bloomberg 9
Stock Market Performance (since end Jun 1997) Stock Market Indices % change end Jun 97 end Aug 04 in local currency in USD Australia 2,726 3,563 30.7 22.1 Hong Kong 15,197 12,850 -15.4 -16.0 India 1,192 1,632 36.8 5.7 Indonesia 725 755 4.2 -73.0 Japan 20,605 11,082 -46.2 -43.6 Korea 745 804 7.8 -17.2 Malaysia 1,077 828 -23.1 -48.9 Philippines 2,809 1,580 -43.8 -73.6 Shanghai A 1,307 1,408 7.8 7.9 Shenzhen A 449 348 -22.7 -18.4 Singapore 1,921 1,918 -0.2 -18.0 Taiwan 9,030 5,766 -36.2 -51.1 Thailand 527 625 18.5 -27.8 Germany 3,786 3,785 0.0 -4.0 UK 4,605 4,459 -3.2 4.7 US (Dow Jones) 7,673 10,174 32.632.2 (Nasdaq) 1,442 1,838 27.5 30.9 10
Tremendous Growth in Mainland Stock Markets 800 800 (1086) ( ) No. of listed companies 700 700 Market capitalisation (US$ bn) Market turnover Market turnover (US$ bn) 600 600 (1370) Market capitalisation 500 500 (1160) (1287) (949) (745) 400 400 (1224) (851) 300 300 (530) 200 200 (291) 100 100 (323) (183) (53) (14) (10) 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Aug- 04 * Turnover - for the 12 months ending Aug 2004 Sources: Shanghai Stock Exchange & Shenzhen Stock Exchange 11
Potential of Chinese Securities Market ♦ Shanghai & Shenzhen – 1,370 listed companies at end Aug 2004 ♦ 4 th largest in Asia, with a market cap of US$471.6 bn at end Aug 2004, 33% of GDP ♦ High domestic savings can be used by securities markets to deleverage Chinese enterprises, improve corporate governance, accelerate competitiveness ♦ China’s entry to WTO: deepen reforms in the securities markets greater access to the Chinese market ♦ Great potential for securities market development ♦ Olympic Games 2008 in Beijing ♦ World Expo 2010 in Shanghai 12
Hong Kong As a Major Fund Raising Centre for the Mainland ♦ 181 Mainland companies as of end Aug 2004, constituting 27% to the total market cap ♦ In 2003, Mainland enterprises raised US$6.8 bn directly and indirectly through HK ♦ In 2002, they raised US$9.1 bn through HK, about the same as the total funds raised from the A markets of Shanghai & Shenzhen ♦ Opportunities for Hong Kong Listing of China’s Global Bonds Growth Enterprise Market (GEM) IPO of Chinese enterprises accounts for 50%+ of HK’s total IPO 13
Hong Kong’s derivative warrants market was the 2 nd active in the world in 2003 Turnover of Derivative Warrants by Major Markets (US$ mn ) 50,000 45,000 2001 2002 2003 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Germany^ Hong Kong Euronext* Switzerland Italy Remarks: * Figures for Euronext are the aggregate figures from the exchanges of Amsterdam, Brussels, Lisbon and Paris. ^ Figures for Germany are the aggregate figures from all German Exchanges (Deustche Borse). Source: HKEx, Exchange, April 2004, pp. 40-58 WFE Monthly Statistics, December 2003 14
Tracker Fund and Exchange- Traded Funds ♦ TraHK: Launched in Nov 1999 ♦ Objective: to sell stocks of US$15 bn that the Government purchased in Aug 1998 ♦ Total sale proceeds > US$17 bn ♦ Largest Index Fund in the world at launch ♦ 5 other ETFs launched: iShares MSCI South Korea Index Fund (2 May 2001) iShares MSCI Taiwan Index Fund (2 May 2001) iShares MSCI China Tracker (23 Nov 2001) H-share Index ETF (10 Dec 2003) Hang Seng Index ETF (21 Sep 2004) 15
Recommend
More recommend
