Asian Markets

Brad Hurvitz

Agenda

1. History of the Markets in Asia2. Early 1970’s3. Asian Miracle4. Asian Crisis5. Stock Exchange Hong Kong6. Market Capitalization7. HKSE Indices8. Conclusion

History of the Markets in Asia

• Stock and securities trading dates back to 1866

• Hong Kong started with 2 exchanges in 1891

• Merged into 1 after WWII to become the Hong Kong Stock Exchange (HGSE)

• HGSE dominated until 1969

Early 1970’s new exchanges

• Far East Exchange• Kam Ngan Stock Exchange

Ltd• Kowloon Stock Exchange

Ltd• Hong Kong Stock Holders

Association Ltd• Merged in 1986 to become

the current Stock Exchange of Hong Kong (SEHK)

Asian Miracle

• Foreign Capital began to flow through the Asian countries in the Pacific Rim– Hong Kong, Thailand,

South Korea, Singapore, Indonesia

• From 1985 – 1995, the Thai economy grew at a rate of 9% per year

Asian Crisis

• Unsound real estate deals lead to speculation from the West

• Asian Markets plummet• Asian Markets became

associated with bad news– Investors confidence

decreased dramatically– Money pulled from the market

• Over the top video

Stock Exchange Hong Kong

• 1999 – budget speech– Comprehensive market reform for

securities and futures market• SEHK and Hong Kong Futures Exchange

Limited were merged with the Hong Kong Securities Clearing Company Limited to form a single company, the Hong Kong Exchanges and Clearing Limited– HKECL is the holding company for Hong

Kong Stock Exchange

Hong Kong Stock Exchange

• Ranks 9th by market capitalization– 2nd largest in Asia, behind

Japan’s Tokyo Stock Exchange– As of 2010, HKSE had 1,413

listed companies with a combined market capitalization of more than $2.3 trillion

– 2 Indices• Hang Seng Index• Hang Seng Composite Index

Market Capitalization

• Public Opinion of Net Wealth

• Share price x number of shares outstanding

• Total value of a company’s shares

Hang Seng Index – started in 1964

• Used to record and monitor daily changes of the top 33 companies of the HKSE– Represents 70% of the total

capitalization• Divided into 4 sub-indexes

– Commerce and Industry– Finance– Utilities– Properties

• Weighted mostly in Finance, Banking, and Property Sectors…not very diversified

Hang Seng Trading History

Comparison to USA

Hang Seng Composite Index – started in 2001

• Holds top 200 listed companies which is composed of 97% of the total capitalization

• According to the economist, 15 families control more than 2/3 of the market

• Broader spectrum of industries than HIS– More diversified

Conclusion

Refrences