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A Dreadful Year For Hong Kong's Stock Market

by Mary Swire, Tax-News.com, Hong Kong

21 December 2001


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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