Hong Kong Stock Exchange
The Hong Kong Stock Exchange is the fifth largest in the world which makes it an important player in the world's financial markets. It has grown quite a bit in recent years, in large part because of all the Chinese companies that have been listed on it since the handover. Combined with the growing economic strength of China this makes for a very important exchange.
The Hong Kong Stock Exchange is one of the oldest exchanges in all of Asia having been originally founded in 1891. There was however informal trading going on long before that date. In the early days there were a lot of small stock exchanges operating in Hong Kong however over time they all merged into one. For many years the HKSE was the only one in the country however that has changed as new exchanges have appeared. That being said none of them are nearly as important in terms of the number of companies that are traded.
There have been a lot of changes to the HKSE over the years but none bigger than the one that occurred after Hong Kong was handed back over to China. Even though Hong Kong operates as a separate economic zone that has different rules, the exchange is now dominated by China. In fact a lot of Chinese companies are listed on the Exchange precisely because of the different rules. The flood of new companies being listed from China combined with the regions strong economic growth has resulted in HKSE becoming one of the most important exchanges in the world.
If you are going to trade on the Hong Kong Stock Exchange it is a good idea to understand that there are some important differences between it and other exchanges. The biggest difference is when it comes to the price of the stocks which are much lower than you will find elsewhere. Most stocks trade for values of less than five dollars. On most Western exchanges investors would stay away from such stocks because generally when they have a price this low they are very unstable. In Hong Kong however this is quite normal even for the largest and most stable of companies.
The other big difference in the way that the Hong Kong Stock Exchange is necessitated by the low cost of the stocks and that is that they are sold in what are known as broad lot sizes. That is there is a certain number of stocks in a lot and you will need to trade them in multiples of this. The number of shares that are in the broad lot will vary from one stock to another. Therefore when you make a trade you need your exchange broker to tell you what the broad lot size is in addition to the price. This makes things a little bit more complicated but it is actually pretty simple once you get used to it.