Hong Kong Stock Exchange (HKEX)

The first formal stock market in Hong Kong came into being in 1891 when the Association of Stockbrokers was established. It was later renamed in 1914, becoming known as the Hong Kong Stock Exchange.

A second stock exchange, The Hong Kong Stockbrokers’ Association, was incorporated in 1921, and in 1947, the two fully merged to become known as The Hong Kong Stock Exchange Ltd.

By 1972, there were four stock exchanges in existence in Hong Kong. These were the Far East Exchange, the Hong Kong Stock Exchange, the Kam Ngan Stock Exchange and the Kowloon Stock Exchange. It made sense fo these to become a unified stock exchange, and on the 7th of July, 1980, the Stock Exchange of Hong Kong (SEHK) was incorporated. This merger allowed the market to grow, and Hong Kong was then able to compete on an international scale.

The 1987 market crash led to reforms in the stock market, and in 1992, The Securities and Futures Commission (SFC) of Hong Kong was set up to regulate the securities and futures markets in the country, and to protect investors coming into the market. The market infrastructure was improved with the introduction of the Central Clearing and Settlement System in 1992 and the Automatic Order Matching and Execution System in 1993, and market rules and regulations have been undergoing continuous review ever since.

The main indices tracking the performance of the Stock Exchange of Hong Kong include:

• The Hang Seng Index. This monitors and records the changes of the 33 largest companies within the Hong Kong stock market.
• The Hang Seng Composite Index. This provides a broad standard for the overall performance of the stock market in Hong Kong.
• The FTSE/Xinhua China 25 Index. This index is also widely used and is used primarily to track the performances of Chinese red chip companies.