Hong Kong Stocks Exchange
Established under British rule, the 125 year old Hong Kong exchange is called the Hong Kong exchange and it is still not as large as its mainland counterpart. The exchange traces its roots to the Association of Stocks brokers in Hong Kong, in 1891 which was the foundation of China`s first formal securities market. The Hong Kong Stocks Exchange Market is one of the largest exchange markets in Asia today with over 1,200 listed firms by the year 2008. in 1993, the exchange introduced automated ordering while in 1995, it introduced stocks option trading. It is Asia`s third largest stocks exchange after Tokyo Stocks Exchange and Shanghai Stocks Exchange in terms of market capitalization. It is also the sixth largest stocks exchange followed by Euronext. Securities lending at the Hong Kong Stocks Exchange commenced in December 1997 when the central monetary authority; which is the Central Money Markets Unit (CMU) commenced a program targeting debt securities in the private sector. The program by CMU was meant to increase the liquidity of private sector debt securities while at the same time enhancing the attractiveness of the same securities to potential investors. The process at the exchange involves markets makers who are mainly CMU members from the private sector being allowed to borrow securities from the rest of CMU members in order to cover their short-term positions. Primarily, securities lending is commonly as a tool of providing coverage for short-selling transactions.