Investor Presentaiton
Markets (2002/03)
100%
Percentage of overseas investor trading
80%
60%
40%
7
2
9
8
4
→
Others
6
3 Rest of Asia
Singapore
16
Mainland China
1 Taiwan
7
2 Japan
22
US
26
24
24
Rest of Europe
16
20%
25
UK
0%
UK
23
Cash market
Derivatives market
Rest of Europe
☐ US
Japan
Mainland China
Taiwan
Singapore
Rest of Asia
Others
Sources: CMTS & DMTS
54.
It is probable that some overseas investors utilize tools available in the Hong
Kong derivatives to hedge or better manage their portfolios in the Hong Kong
cash market. However, given that most funds still have long-only mandates,
the close resemblance of composition of overseas investor trading by origin in
the cash and derivatives markets might be the result of international financial
conglomerates (large brokerage houses) being active both in Hong Kong's cash
and derivatives markets.
Overseas stock investors of different origins are served by different broker groups²0.
55.
56.
UK investors, which are the most significant group of overseas contributors to
cash market trading, mainly trade in the cash market through the medium-sized
brokers. US investors, the second most significant group, mainly trade through
the large-sized brokers. Small-sized brokers have a niche in serving Asian
investors, especially those from Mainland China. (Chart 9)
There is some indication that the origin of client orders may be related very much to
the origin of the broker. In Hong Kong, there are a number of US and UK brokerage
firms, many of which belong to large global conglomerate groups. These firms will
serve as the brokerage arms for executing orders channeled from their sister
companies in their countries of origin. The pattern of serving clients from the same
country origin is also observed among broker firms of other country origins such as
Japan and Taiwan.
20
Stock brokers are grouped into large-sized, medium-sized and small-sized according to their
contribution to the market turnover value during the study period of CMTS those contributing the
-
top one-third are large-sized, second one-third are medium-sized and bottom one-third are small-sized.View entire presentation