THE rise of the institutional investor in the Hong Kong stock market will have implications for stock exchange regulation, according to Mineo Murai, vice-chairman of Nomura International (Hong Kong).
'I am quite happy with the present situation, but I think the major players so far in the Hong Kong market have been private individuals,' he said.
'In the future, institutional investors will play a more important role, so we may need a little bit tougher rules and regulations, particularly in the respect of insider trading and transparency. We expect some improvement in these areas.' Mr Murai said the Japanese example of regulation had some important lessons for Hong Kong.
'Rules and regulations are one thing, but what is important is how the rules are applied,' he said.
'Japan has a lot of rules and regulations but their application is so complex. There is a lot of Government intervention which might not be healthy for the stock market.' Mr Murai believed Hong Kong would maintain its lead as the favoured listing market for mainland companies going offshore.
'Hong Kong or Singapore will be the most important markets for Chinese companies because the investors who understand Chinese industries or economic conditions are Asian based.
'We expect more institutional investors later but, for now, the major players in Hong Kong and Singapore, even the Japanese market, are private individuals.
