Hong Kong

Posted By Steve On Wednesday, October 28th, 2009 With 0 Comments

Stock Exchange of Hong Kong Equities

Trading Hours
Monday to Friday:
Pre-opening session: 09:00 – 09:30
Morning session: 09:30 – 12:00
Extended morning session: 12:00 – 13:00
Afternoon session: 13:00 – 16:00

There is no extended morning session and afternoon session on the eves of Christmas, New Year and Lunar New Year. There shall be no extended morning session if there is no morning session.

Security Identifiers
ISIN (International Securities Identification Numbering): Yes, but only for client reporting.

Other: There is no standard. A SEHK four-digit code is used for trading and ISIN and others are in use.

Instruments

Equities: Ordinary shares, preference shares, warrants, provisional allotment letters relating to nil paid rights, H-shares (Chinese shares trading on the SEHK) and the seven NASDAQ stocks admitted to trading by the SEHK.
Debt: Convertible bonds, corporate bonds, government bonds (exchange fund bills, notes), floating rate notes.
Money Market: Certificates of deposit, commercial paper.
Physical: The use of the central depositories is not mandatory. Some investors are still holding equities, debt securities and other financial instruments in physical form.
Other: Investment Trusts: unit trusts, mutual funds, exchange traded funds.
Derivatives: Equity Index Products: Hang Seng Index Futures and Options, Mini-Hang Seng Index Futures and Options, MSCI China Free Index Futures, Dow Jones Industrial Average Futures. Equity Products: Stock Futures and Stock Options Interest Rate and Fixed Income Products: Three year Exchange Fund Note (EFN) Futures, HIBOR Futures, callable bull/bear contracts.

Board Lots

Equities: Board lot size is suggested by the listing company and approved by the SEHK. A board lot is usually 500, 1,000 or 2,000 shares. Odd lots are usually sold at a discount. Brokers do not typically accept purchase orders for odd lots.

For the seven NASDAQ stocks, board lot size is from 10 to 100 shares.

Note: The maximum order size permitted for AMS automatching is 3,000 board lots.
Debt: No set board lots

Entitlements

Dividend Payment Frequency: Semi-annual or annual

Interest Payment Frequency: Quarterly, semi-annual or annual

Interest Accrual Rate: Actual/365-day or actual/360-day basis

Corporate Actions

Common Events: New issues, mergers, acquisitions, share splits/consolidations, bonus or rights issues, share exchanges, and company-issued warrants
Rights Tradeable: Yes
New shares from exercised rights: Received within three to four weeks

Proxy Voting

Foreign Investor Restrictions: Unrestricted voting rights except for television licensee companies and HKEx.

Shares Blocked: No

Meeting Notices/ Agendas:
Annual general meetings are announced three to four weeks in advance, and extraordinary general meetings two to three weeks in advance.

Meeting Outcome: Provided in English

Company Reports: On request, subject to availability

Power of Attorney: Not required

Foreign Ownership:

Market Entrance Requirements: None

Investment Restrictions: Individual foreign ownership of shares of a television licensee company is limited to no more than 10% of the company’s voting rights and the aggregate limit cannot exceed 49%. The Broadcasting Authority monitors ownership limits. Permission from the Broadcasting Authority is required when a foreign investor plans to acquire 2% or more of the company’s voting rights.

No person may hold 5% or more of HKEX shares without approval from the SFC.

Repatriation Policy: Funds can be repatriated freely.

Securities Lending:

Both the lender and the borrower have to comply with a number of criteria and enter into a Securities Lending and Borrowing Agreement in order to qualify for the stamp duty exemption.

Taxation:

Dividend Tax Rate: None

Interest Tax Rate: Foreign investors are exempt.

Capital Gains Tax Rate: None

Tax Treaties: None (for securities investment)

Stamp Duty: An ad valorem stamp duty of 0.1% of trade value is payable by both buyer and seller. Transactions with no change in beneficial ownership can be exempted by applying to Inland Revenue. An embossed stamp duty of HKD 5 per transfer deed, payable by the first seller, is levied on physical shares.

Both buyer and seller are required to pay a stock exchange trading fee of 0.005% of trade value and a SFC transaction levy of 0.004% of trade value.

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