12 -
Fong
2.18 A different measure, which suggests that Hong Kong has a position in the region's stock exchanges (aside from Tokyo) is that, of the top ten companies by capitalisation, six were from Hong Kong and only one each from Malaysia and Korea and two from Taiwan.
Table 1: Company Capitalisation in Far East Stock Exchanges
US$ Bn
Country
Korea Electric Power
12.4
Korea
Hong Kong Telecomm
11.3
Hong Kong
Cathay Life
8.7
Telekom Malaysia
8.4
HSBC
8.3
China Steel
7.1
Taiwan
Malaysia
Hong Kong
Taiwan
Hutchison Whampoa
6.4
Hong Kong
Sun Hung Kai
6.3
Hong Kong
Cheung Kong
6.0
Hang Seng Bank
5.9
Hong Kong Hong Kong
2.19 Hong Kong is also a much more active market than Singapore, with turnover totalling US$80 bn during 1990 and 1991, slightly more than double that in Singapore. Hong Kong stock prices that also been more buoyant, with the Hang Seng index rising 15% between 1990 and 1991, whereas prices on the Singapore exchange have been static
overall.
2.20 Another area in which the Hong Kong stock market can expect to benefit from its proximity to China is through the use of its stock exchange by Chinese entities. Neither Singapore nor Tokyo has this natural advantage, while Taiwan, despite its increasing affiliations to the Mainland is also excluded for both political and geographical reasons. Chinese companies have recently started to be listed on the Hong Kong Stock Exchange, with some success in terms of the interest of local investors. It also seems likely that the Hong Kong and Shenzhen exchanges will at some point have cross-listings, particularly of the more dynamic companies based in Guangdong Province. However, company laws, accountancy standards and regulation all lag in the PRC, and the actual implementation of practical measures may be some time off, though the Hong KongSE has set up a China Study Group.
The main flow of assistance has in fact been in
international financial companies with Hong Kong operations (eg
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