Published On: Tue, Mar 6th, 2012

HKEx Securities Market Growth Strongly Supported by Overseas Investors

Trading by overseas investors attained a compound annual growth rate (CAGR) of 34 per cent in the past decade, strongly supporting overall market growth, according to the Cash Market Transaction Survey 2010/11 released 6 March 2011 by Hong Kong Exchanges and Clearing Limited (HKEx).

In 2010/11, overseas investors contributed 46 per cent of total market turnover value, similar to 2009/10. Local investors contributed 42 per cent, down from 44 per cent in the previous year. Institutional investors contributed 62 per cent of total market turnover value (64 per cent in 2009/10), remaining above 60 per cent for the sixth consecutive year. The contribution from retail investors was 27 per cent in 2010/11, compared to 26 per cent in the previous year.

Some other key findings of the 2010/11 survey

Overseas institutional investors, the largest contributors among all investor types, contributed 42 per cent of total market turnover, similar to their contribution in 2009/10.

Local institutional investors contributed 20 per cent to total market turnover, down from 23 per cent in 2009/10.

Local retail investors contributed 22 per cent to total market turnover, compared to 21 per cent in 2009/10.

Exchange Participants’ principal trading contributed a record high of 12 per cent of total market turnover in 2010/11, up from 10 per cent in 2009/10.

Findings regarding trading value by overseas investors show that:

US investors regained their status as the largest contributors to overseas investor trading in 2010/11 with a contribution of 28 per cent, up from 24 per cent in 2009/10.

UK investors, the second largest contributors, contributed 27 per cent of overseas investor trading in 2010/11, compared to 29 per cent in 2009/10.

Continental European investors were ranked third with a contribution to overseas investor trading of 14 per cent in 2010/11, compared to 16 per cent in 2009/10.

The contribution of investors from Mainland China to overseas investor trading was 10 per cent in 2010/11, compared to 11 per cent in 2009/10.

Asian investors in aggregate contributed 22 per cent of overseas investor trading in 2010/11, compared to 27 per cent in 2009/10.

There were 17 reported origins of overseas investors in Asia and over 36 reported origins of overseas investors outside Asia, Europe and the US.

The survey examined for the first time the CAGR in trading value by investor type in the past decade. The three overseas origins that had the highest CAGR were Mainland China (47 per cent), US (36 per cent) and UK (34 per cent) .

Retail online trading accounted for 26 per cent of total retail investor trading (27 per cent in 2009/10) and 7 per cent of total market turnover (similar to that in 2009/10).

The Cash Market Transaction Survey has been conducted annually since 1991. Each year’s survey covers HKEx’s securities market turnover for the 12-month period from October the previous year to September the following year. For the 2010/11 survey, questionnaires were sent to a target population of 471 Exchange Participants. The response rate was 92 per cent by number and 96 per cent by turnover value of the target respondents.

The full report on the Cash Market Transaction Survey 2010/11 is available on the HKEx website.

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