A Dreadful Year For Hong Kong's Stock Market
Announcing figures for the performance of the Hong Kong stock exchange
this year, Hong Kong Exchanges and Clearing said yesterday that average
daily turnover shrank a third to HK$8.17 billion, down from HK$12.33 billion
last year, while the Hang Seng index has dropped 24% on the year to date.
A mere HK57.7bn of capital has been raised on the stock market, 88% down
from last year's HK$467.3 billion. HKEx chief executive Kwong Ki-chi said that poor investor mood was to
blame for the quiet year, while 2000 had seen record volumes of trading
and fund-raising. "We had an exceptionally good year in 2000. It
makes this year look poor, but actually it was only back to the normal
level of the market," Mr Kwong said. He thinks that China's entry into the World Trade Organisation will ignite
a rebound in fund-raising activities next year: "With China's entry
into the WTO, many mainland enterprises will need to raise funds to strengthen
themselves in preparation for competition with foreign firms," he
said. "This will increase the demand for mainland companies to raise
funds in the SAR market." Mr Kwong said he was not unduly concerned by the possibility of mainland
companies listing on the domestic markets in Shanghai or Shenzhen instead:
"For the companies which want to raise funds in Hong Kong dollars
or for those which want to have a wider access to international investors,
Hong Kong will be their first choice," he said. .
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