Definition
Hong Kong Exchanges and Clearing Limited (HKEx) is the primary stock exchange in Hong Kong and one of the largest financial market operators globally. Established in 2000, it is responsible for the operation and regulation of the securities and derivatives markets. HKEx also offers trading services, market data services, settlement services and depository services among other functions.
Phonetic
“Hong Kong Exchanges and Clearing Limited (HKEx)” can be phonetically written as:”hɒŋ kɒŋ ɪks’tʃeɪnʤɪz ænd klɪərɪŋ ‘lɪmɪtɪd (eich kei ex)”
Key Takeaways
- Hong Kong Exchanges and Clearing Limited (HKEx) is among the globe’s topmost exchange groups. It connects investors both within and outside China, driving capital formation, and offering resources and support for companies to realize their business ambitions.
- HKEx comprises a variety of market platforms including stocks, commodities, derivatives, and fixed income. It operates securities and derivatives markets along with their respective clearing houses, putting it in a unique position in the global market ecosystem.
- In recent years, HKEx has implemented reforms targeting to reinforce Hong Kong’s position as an international business hub and China’s gateway to the world. These measures include the introduction of new listing and trading platforms, diversity in product offerings, and enhancing cross-border access methods.
Importance
Hong Kong Exchanges and Clearing Limited (HKEx) is a vital entity within international finance as it is the primary stock exchange in Hong Kong and one of the largest globally. It operates the securities and derivatives markets and their related infrastructure, thus acting as a pivotal asset for regional capital flow. As a parent to other key exchanges such as the London Metal Exchange, it plays a crucial role in global trade, both in terms of commodities and financial instruments. Providing access to a variety of investment opportunities, HKEx deeply impacts business operations globally. Its significant influence over financial market conditions makes it crucial in shaping global financial landscapes.
Explanation
Hong Kong Exchanges and Clearing Limited (HKEx) is a significant entity in the world of finance, serving as the primary stock exchange operator in Hong Kong. Its main purpose is facilitating and supervising the trade of a broad variety of financial products, such as equities (shares), futures, options, fixed-income securities, and various commodities. By doing so, HKEx provides a transparent, secure, and streamlined platform for buyers and sellers, whether individuals, businesses, or institutional investors, to transact in these products.HKEx’s functioning and importance extend beyond its exchange operations, as it also delivers other financial services. These include clearing, which involves acting as an intermediary in transactions to ensure they are completed successfully and securely, as well as settlement services, which finalize the transfer of securities or commodities from sellers to buyers. HKEx plays a crucial role in promoting financial stability and bolstering investor confidence in Hong Kong’s market, shaping the city into one of the world’s top financial centers.
Examples
1. Alibaba Group’s Listing: In November 2019, Alibaba Group, one of the biggest technology companies in the world, listed its shares on the Hong Kong Exchanges and Clearing Limited (HKEx) in a ‘homecoming’ listing. Previously, Alibaba was only listed on the New York Stock Exchange, but by listing on the HKEx, they were able to raise nearly $11.2 billion additional capital, marking one of the largest public offerings in 2019.2. Exchange Traded Funds (ETFs): HKEx is popular for its diverse set of Exchange Traded Funds that tracks different markets worldwide. An example is the Tracker Fund of Hong Kong (TraHK), which is managed by State Street Global Advisors Asia. This fund mirrors the performance of the Hang Seng Index, providing investors from different regions access to shares of the top-performing companies in Hong Kong.3. Initial Public Offering (IPO) listings: In 2018, the HKEx was the top global venue for IPOs, driven by listings from the new economy sector and biotech companies. Companies like smartphone maker Xiaomi Corp and food delivery giant Meituan Dianping were among those that went public in Hong Kong that year, together raising billions of dollars in funds. This shows how HKEx serves as an important platform for companies to raise capital in the international market.
Frequently Asked Questions(FAQ)
What is Hong Kong Exchanges and Clearing Limited (HKEx)?
HKEx is the primary stock exchange in Hong Kong. It is one of the largest market operators in the world and is responsible for operating the securities and derivatives markets in Hong Kong and for the clearing of transactions within those markets.
When was HKEx established?
Hong Kong Exchanges and Clearing Limited was established in 2000 through a merger of the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange, and the Hong Kong Securities Clearing Company.
What type of companies are listed on HKEx?
HKEx hosts listed companies across all sectors, from conglomerates to tech start-ups, from various parts of the world, including Mainland China and international markets.
How can one trade on the HKEx?
To trade on HKEx, one needs to open a brokerage account with a firm that is a member of the HKEx. The procedures for trading on HKEx may vary from broker to broker.
Is HKEx open to foreign investors?
Yes, foreign investors are welcome to trade on HKEx, subject to their local jurisdictions’ investment regulations.
What are the trading hours of HKEx?
Normal trading sessions on HKEx are from 9:30 AM to 12:00 PM and 1:00 PM to 4:10 PM, local time, Mondays to Fridays, with the exclusion of public holidays.
Is HKEx regulated and, if so, by whom?
HKEx is self-regulated and is also overseen by the Securities and Futures Commission (SFC), which ensures fair and transparent operation of the securities and futures markets in Hong Kong.
What is the key stock index of the HKEx?
The key stock index is the Hang Seng Index (HSI), which is a benchmark for blue chip stocks listed on HKEx and is often used as an indicator of the overall market performance in Hong Kong.
What are the listing requirements for HKEx?
The listing requirements for HKEx include, but are not limited to, a consistent profit track record of at least three years, adequate market capitalization, and a certain number of shares in public hands. More specific details can be found in the HKEx listing rules.
Where can I find more information about HKEx?
You can visit the official HKEx website to find out more detailed and updated information about the exchange, specific stocks, recent market activities, and news.
Related Finance Terms
- Securities Market
- Futures Market
- Stock Connect
- Clearing House
- Initial Public Offering (IPO)
Sources for More Information
