Products on HKEx receive mixed response

PUBLISHED : Monday, 11 June, 2001, 12:00am
UPDATED : Monday, 11 June, 2001, 12:00am

Hong Kong Exchanges and Clearing (HKEx) products received a mixed reception from investors last month.

While investors were busy trading main board and Growth Enterprises Market (GEM) stocks, they showed little interest in investment products recently launched by the exchange.

According to the most recent figures, 2.66 million main board shares were traded last month, a 46 per cent increase on the April figure.

The GEM registered strong investor interest, posting 148,071 trades last month, a 116 per cent increase over April.

But the level of interest was dismal in new products introduced by the exchange last month.

A total of 28 transactions were made in the two Exchange Traded Funds, known as iShares. The transactions - the total for the 22 trading days last month - were worth HK$46.13 million. On average, about four iShares have been traded each day since their launch on May 2.

Another new product, MSCI China Free Index futures, also posted poor results, with only 771 transactions made since its debut on May 7 - an average of 41 contracts were traded each day.

Traditional futures contracts received a more favourable response, with 490,071 trades during the month, up 20 per cent from the previous month.

Legislator Henry Wu King-cheong, representing brokers, said the paltry trading was because local investors were unfamiliar with the new exchange products.

'I think most local investors have got used to trading listed equities,' he said. 'But it will take some time for investors to learn how to trade the new products.'

There are about 90 Exchange Traded Funds around the world, listed mainly on the American Stock Exchange.

These funds, which allow investors to trade funds like any other stock, usually track the market's key index. An investment in an exchange-traded fund is like buying a basket of stocks.

The seven Nasdaq stocks that trade in Hong Kong also received a poor response from investors, with a total trading value of only HK$11.07 million last month.

The SAR exchange said the average daily turnover of the main board last month was 8,553 million shares, up 43 per cent from the previous month.

In terms of value, the average daily turnover last month was HK$9.63 billion, a 12 per cent rise compared with the previous month but a decrease of 8 per cent on the year earlier.

The GEM also had more active trading records, with average daily turnover last month at HK$350 million, an increase of 100 per cent compared with the previous month and 126 per cent higher than a year earlier.

Brokers said the growth in the main board and the GEM was because of the healthy sentiment on China stocks, which were expected to benefit from China's entry into the World Trade Organisation this year.

The Hang Seng China Enterprise Index stood at 537.81 at the end of last month, up 13 per cent on April, while the benchmark Hang Seng Index stood at 13,174.41 at the end of last month, down 1.58 per cent on April.

During the month, 11 companies were listed on the main board and six on the GEM, making May the most active month for listings this year.

At the end of last month, a total of 741 main board companies and 75 GEM firms were listed.