hkex retail investor survey 2014 key findings€¦ · hkex retail investor survey 2014 ......

HKEx Retail Investor Survey 2014

Key Findings

March 2015


2 2

Content

1. Retail participation rates

2. Investor profile

3. Stockholding and trading pattern

4. Derivatives trading pattern

5. Trading channel and online trading

6. Investor perceptions of the HKEx markets

Appendix 1. Survey methodology

Appendix 2. Glossary


3

1. Retail participation rates

Stock investors reached the highest level in record — 2.25 million individuals, 36.2%

of Hong Kong adult population.

Figure 1. Trend of stockowners and stock investors

9.0%8.0%

9.0%

14.0%

13.0%

19.0%18.6%

19.0%

15.9%

22.8%

27.0%

32.4% 32.6%33.8%

34.5%

9.0%10.0%

16.0%16.0%

21.5%20.3% 19.8%

17.5%

24.4%

28.6%

35.7%35.0%

35.7% 36.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

400

800

1,200

1,600

2,000

2,400

2,800

1989 1992 1994 1997 Jan

1999

Nov

2000

Dec

2001

Dec

2002

Dec

2003

Oct

2004

Dec

2005

Dec

2007

Dec

2009

Dec

2011

Dec

2014

Per

cent

age

of a

dult

pop

ulat

ion

as

stoc

kow

ners

/ s

tock

inv

esto

rs

Pro

ject

ed n

umbe

r of

sto

ckow

ners

/

stoc

k in

vest

ors

('000

)

Trend of stock owners and stock investors

Projected number of stockowners Projected number of stock investors

Percentage of adult population as stockowners Percentage of adult population as stock investors


4

1. Retail participation rates (cont’d)

95% of stock investors invested in equities traded on HKEx.

Stock investors’ participation rate in ETFs is high — 30% (or 11% of adult population).

Collectively, about 10% of stock investors invested in warrants and/or CBBCs — 9.1% in

warrants and 4.5% in CBBCs.

80% of stock investors had stock transactions in the 12 months preceding the survey interview

(i.e. stock traders).

Figure 2. Percentage of stock investors by type

Note: Findings on characteristics of CBBC investors are subject to relatively large error due to the small sample size.

94.7%

9.1%4.5%

30.5%

79.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Equity

investors

Warrant

investors

CBBC

investors

ETF

investors

Stock

traders

% o

f st

ock

in

ves

tors

Percentage of stock investor by types


5


Investor participation in HKEx derivatives market remained relatively low —

~100,000 individuals, 1.6% of the adult population.

Figure 3. Trend of derivatives investors

Note: Findings on characteristics of derivatives investors are subject to relatively large error due to the small sample size.


6


Hong Kong individuals’ participation in Mainland China and other overseas stock

markets is relatively low.

Figure 4. Participation in Mainland stock market Figure 5. Participation in other overseas markets

135

251

183 153

209

2.4%

4.4%

3.1%

2.5%

3.3%

0%

1%

2%

3%

4%

5%

0

50

100

150

200

250

300

350

400

Dec 2005 Dec 2007 Dec 2009 Dec 2011 Dec 2014

Perc

enta

ge o

f adult

popula

tion

Pro

jecte

d n

um

ber

of

indiv

iduals

('0

00)

Trend of HK adults invested in overseas stock markets other than China (2005 - 2014)


7

2. Investor profile

■ 47 years old

■ Tertiary or above education

■ Monthly personal income:

~HK$22,500

■ Monthly household income:

~HK$45,000

■ 42 years old

■ Tertiary or above education

■ Monthly personal income:

~HK$35,000

■ Monthly household income:

~HK$75,000

Typical Hong Kong

retail stock investor

Typical Hong Kong

retail derivatives investor


8

3. Shareholding and trading pattern

For stock investors, the median stockholding value is HK$200,000 and the median listed

company shareholding value is HK$150,000.

ETF investors and warrant investors tend to have a higher stockholding value.

Figure 6. Median stockholding and shareholding value by stock investor type

Note: Stockholding refers to the holding, at the time of the interview, of all HKEx cash market products.

Listed company shareholding refers to the holding, at the time of the interview, of listed company shares traded on HKEx.

200 200

400

100

300

150 150

270

100

200

0

50

100

150

200

250

300

350

400

450

500

All stock

investors

Equity

investors

Warrant

investors

CBBC

investors

ETF

investors

(HK

$'0

00

)

Median stockholding value by stock investor types

Stockholding value Shareholding value


9

3. Shareholding and trading pattern (cont’d)

In median terms, a stock investor had 6 stock transactions and a stock trader (i.e. excluding non-

trading stock investors) had 10 stock transactions in 2014.

Warrant and CBBC investors traded much more frequently than general stock investors.

Figure 7. Median number of stock transactions in the past 12 months

6 6

38

50

10 10

0

10

20

30

40

50

60

All stock

investors

Equity

investors

Warrant

investors

CBBC

investors

ETF

investors

All stock

traders

Median number of stock transactions in the past 12 months (2014)

Including non-trading investors


10

3. Shareholding and trading pattern (cont’d)

In median terms, a stock trader had an average stock transaction value of HK$50,000.

Warrant and CBBC investors tended to have a smaller deal size than equity investors.

Figure 8. Median average stock transaction value

Note: Stock transaction value refers to transactions in all HKEx cash products.

50,000 50,000

44,000

30,000

50,000

0

10,000

20,000

30,000

40,000

50,000

60,000

All

stock traders

Equity

investors

Warrant

investors

CBBC

investors

ETF

investors

(HK$)

Median average stock value in the past 12 months (2014)


11

4. Derivatives trading pattern

In median terms, a derivatives investor had 6 derivatives

transactions on HKEx in 2014, with an average transaction size

of 2 contracts.

Note: (1) Derivatives are futures and options traded on HKEx.

(2) Reflecting the nature of derivatives trading, all derivatives investors had

derivatives transactions during the 12-month period, i.e. all derivatives

investors are derivatives traders.

(3) Findings are subject to relatively large error due to the small sample size.


12

5. Trading channel and online trading

The majority of stock traders traded mainly through banks (75%).

Figure 9. Stock trading channels of stock traders

Mainly through banks

(74.9%)

Same usage of

banks and broker firms

(1.4%)

Mainly through

broker firms

(23.7%)

Banks only

71.2%

Usually banks

3.7%

Broker

firms only

19.7%

Usually

broker

firms

4.0%

Stock trading channels of stock traders (2014)


13

5. Trading channel and online trading (cont’d)

The majority of derivatives investors traded mainly through broker firms.

Figure 10. Derivatives trading channels of derivatives traders

Mainly through banks

(28.4%) Mainly through

broker firms

(71.6%)

Banks only

28.4%

Broker firms

only

69.8%

Usually broker

firms

1.8%

Derivatives trading channels of derivatives investors (2014)


14


Investors trading mainly through broker firms tended to have a higher trading

frequency than those trading mainly through banks.

Table 1. Trading pattern of stock traders by trading channel

Trading in the 12-month period preceding the interview Mainly through

banks

Mainly through

broker firms

Median number of stock transactions* 10 16

Median average value per stock transaction (HK$)* 50,000 50,000

Median implied total stock transaction value (HK$)* 400,000 1,000,000

Contribution to total stock transaction value of all stock traders 62% 36%

* Excluding outliers.

Table 2. Trading pattern of derivatives traders by trading channel

Trading in the 12-month period preceding the interview Mainly through

banks

Mainly through

broker firms

Median number of derivatives transactions* 4 10

Median average contract volume per derivatives transaction* 4 2

Median implied total derivatives contract volume* 12 80

* Excluding outliers.


15


Online stock traders as a proportion of all stock traders rose to 73%.

Online derivatives traders as a proportion of all derivatives traders rose to 84%.

Figure 11. Trend of online stock traders and online derivatives traders (2002 – 2014)

44.2%

30.1%35.8%

38.5%

58.8%66.9%

68.7%

73.0%

29.9%26.1%

29.3%

37.5%

49.2%

69.1%

67.2%

84.0%

0%

20%

40%

60%

80%

100%

Dec 2002 Dec 2003 Oct 2004 Dec 2005 Dec 2007 Dec 2009 Dec 2011 Dec 2014

Trend of online stock traders and online derivatives traders (2002 - 2014)

Online stock traders as percentage of all stock traders

Online derivatives traders as percentage of all derivatives traders


16

6. Investor perceptions of the HKEx markets

Investors had generally positive perceptions of all aspects of the HKEx stock and derivatives

markets assessed in the survey. Notes: A 7-point rating scale ranging from “Strongly Disagree” (score 1) to “Strongly Agree” (score 7) was used in the survey

questionnaire. The classification into Agree (score 5-7) – Average (score 4) – Disagree (score 1-3) was used for presentation in

the charts below for the purpose of easy understanding.

Mean

Score

5.63

5.30

5.17

5.03

Figure 12. Perceptions of the Hong Kong stock market by stock investors (2014)

Mean

Score

5.02

4.88

4.81

4.36

4.16 68%

76%

78%

87%

16%

12%

12%

7%

14%

12%

10%

6%

2%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perceptions of the Hong Kong stock market (2014)

Agree Average Disagree No comment / don’t know

The Hong Kong stock market is a fair and orderly market

Regulation of stock brokers is effective

There is good trading information available in the Hong Kong

stock market

There are enough good quality listed companies available for investment

36%

49%

63%

64%

70%

17%

19%

20%

17%

15%

26%

28%

17%

18%

15%

21%

4%

1%

1%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perceptions of the Hong Kong stock market (2014)


Regulation of listed companies is

Listed companies have good disclosure of information

Stock investors are well-protected

Regulation of insider trading is effective

Regulation of the issuers of warrants/CBBCs is effective


17

6. Investor perceptions of the HKEx markets (cont’d)

Figure 13. Perceptions of the HKEx derivatives market by derivatives investors

Figure 14. Perceptions of HKEx

Mean

Score

4.80

4.80

3.85

4.46

Mean

Score

4.77

4.36

4.25 46%

48%

55%

61%

18%

26%

15%

23%

36%

26%

30%

16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perceptions of the HKEx derivatives market (2014)


The HKEx derivatives market is a fair and orderly market

There is good trading information available in the HKEx derivatives market

Regulation of HKEx derivatives brokers is effective

HKEx derivatives investors are well-protected

49%

62%

62%

4%

15%

15%

47%

20%

21%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perceptions of HKEx (2014)


All derivatives investors

HKEx gives priority to the public interest

All retail investors

All stock investors


18

Appendix 1. Survey methodology

Fieldwork period: 12 Nov 2014 – 23 Dec 2014

Random sampling of individuals aged 18 or above in Hong Kong

Total sample size: 2,271 individuals

1,006 stock Investors

45 derivatives investors


19

Appendix 2. Glossary

Term Description

Derivatives

investor

An individual who was holding futures and options traded on HKEx at the time

of interview or had traded derivatives in the 12 months preceding the interview.

Online stock

Trader

A stock trader who had traded stocks in the 12 months preceding the interview

through electronic media such as the Internet, either always or sometimes.

Retail investor An individual who is a stock investor AND/OR a derivatives investor.

Stock investor An individual who was holding stocks at the time of interview OR had traded

stocks in the 12 months preceding the interview. (That is, the individual is a

stockowner and/or a stock trader.)

Stock trader An individual who had traded stocks in the 12 months preceding the interview.

Stockowner An individual who was holding stocks at the time of the interview.

Stocks Equities (i.e. shares of listed companies), warrants, Callable Bull/Bear Contracts

(CBBCs), Exchange Traded Funds (ETFs), Real Estate Investment Trusts

(REITs), bonds and other cash market products listed or traded on HKEx.

Equity investor /

Warrant investor /

CBBC investor /

ETF investor

An individual who was holding the type of securities at the time of the interview

or had traded them in the 12 months preceding the interview.

hkex retail investor survey 2014 key findings€¦ · hkex retail investor survey 2014 ......

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