Overseas investor participation in HKEx's Securities Market remains high

Overseas investor participation in HKEx's Securities Market remains high

11/03/10

Overseas investor participation in the securities market of Hong Kong Exchanges and Clearing Limited (HKEx) remained high despite the market downturn during the global financial crisis, according to HKEx's Cash Market Transaction Survey 2008/09 (covering HKEx's securities market turnover from October 2008 to September 2009).

The survey found that the contribution of overseas investors to total market turnover value remained at a relatively high level of more than 40 per cent for the fourth consecutive year  (42 per cent in 2008/09, compared to 41 per cent in 2007/08) while local investors' contribution fell to a record low of 50 per cent.  The contribution of institutional investors decreased somewhat from its peak of 65 per cent in 2006/07 and 2007/08 to 62 per cent in 2008/09.  The contribution of retail investors was 30 per cent, similar to the all-time low of 29 per cent in 2007/08.

Some other key findings of the 2008/09 survey

  • Overseas institutional investors, the largest contributors among all investor types, contributed 38 per cent to total market turnover, similar to the level in 2007/08.  (Figure 1)
     
  • Local retail investors' contribution to total market turnover was a record low of 25 per cent in 2008/09, compared to 26 per cent in 2007/08.  (Figure 1)
  • Local institutional investors' contribution fell from 27 per cent in 2007/08 to 24 per cent in 2008/09.  (Figure 1)
  • Exchange Participants' principal trading contributed a record high of 8 per cent of total market turnover in 2008/09, up from 6 per cent in 2007/08.  (Figure 1)
     
  • Findings regarding trading value by overseas investors by origin show that (Figure 3):
     - US investors, the largest contributors to overseas investor trading since 2004/05, contributed 36 per cent of overseas investor trading in 2008/09, up from 35 per cent in 2007/08.
    - UK investors, the second largest contributors, contributed 23 per cent of overseas investor trading, up from 22 per cent in 2007/08.

- The contribution of investors from Continental Europe to overseas investor trading decreased sharply from 16 per cent in 2007/08 to 10 per cent in 2008/09.

- The contribution of investors from Mainland China increased from 8 per cent of overseas investor trading in 2007/08 to 12 per cent in 2008/09 and they became the third largest group of overseas contributors.

- The aggregate contribution from Asian investors to overseas investor trading increased from 22 per cent in 2007/08 to 26 per cent in 2008/09.

  • Retail online trading accounted for 21 per cent of total retail investor trading and 6 per cent of total market turnover, up from the corresponding levels in 2007/08.  (Figure 4)

The Cash Market Transaction Survey has been conducted annually since 1991.  For the 2008/09 survey, questionnaires were sent to a target population of 440 Exchange Participants.  The response rate was 93 per cent by number and 99 per cent by turnover value of the target respondents.

The full report on the Cash Market Transaction Survey 2008/09 is available on the HKEx website.