Investor Presentaiton
17.
18.
It is also found that in the stock market, the contribution from EPs' principal trading
tend to increase during bearish times (e.g. 8% in 1995/96 and 7% in 2001/02). This is
probably because in bearish times when client trading decreases stock brokers
increase principal trading to earn money. In the derivatives market where there is
market making for certain products (mainly the options products), principal trading by
brokers would be generally higher than in the cash market.
Compared to their contribution to the stock market turnover, local institutions'
contribution to the derivatives market turnover is minor. This might be because many
local funds are restricted from trading derivatives by their mandates (Chart 4).
Chart 4 - Investor Mix in the Cash and Derivatives Markets (2002/03)
Percentage of total market turnover
19
2
Overseas
retail
100%
EPs' principal
90%
80%
35
70%
Overseas
institutional
30
60%
50%
28
40%
Local
institutional
11
30%
20%
Local retail
38
30
10%
0%
Sources: CMTS, DMTS
Cash market
Local retail investors
Overseas retail investors
Local institutional investors
EPS' principal trading
Local Retail Investors
6
Who are they?
Derivatives market
(HSI futures and options)
Overseas institutional investors.
A core group of stock investors with a fringe group entering and exiting the market
depending on market conditions.
19. The typical (i.e. median) Hong Kong retail stock investor is found to be a
middle-aged white-collar worker with educational level and income level
higher than the average individual in the adult population (Table 1).
6
Main sources for analysis: HKEX RIS and ORIS, SFC-RIS, IFA-IS.View entire presentation