A survey conducted by Hong Kong Exchanges and Clearing Limited (HKEx) in December 2002 revealed that one in five Hong Kong adults invests in Hong Kong stocks or derivatives. Retail investor numbers in the Hong Kong stock market were little changed from the previous survey, while retail investor numbers in the Hong Kong derivatives market decreased.

The Omnibus Retail Investor Survey 2002 revealed that:

• 19.8 per cent of Hong Kong adults (or 1,073,000 individuals) were stock investors who at the time of the interview were holding stocks listed or traded on the HKEx stock market (including shares, warrants and Exchange Traded Funds) or had traded stocks during the 12 months preceding the interview. The figure was similar in 2001 and 2000.

   

• 3.5 per cent of Hong Kong adults (or 190,000 individuals) were derivatives investors who at the time of the interview were holding futures or options traded on the HKEx derivatives market or had traded the market!|s products during the 12 months preceding the interview. The figure was down from 5.2 per cent in 2001. (It should be noted that the statistics on derivatives investors are relatively less precise due to the small sample of derivatives investors obtained).

   

• 20.2 per cent of Hong Kong adults (or 1,097,000 individuals) were retail investors, either stock investors or derivatives investors.

   

 

A typical Hong Kong retail stock investor is a 42-year-old white-collar worker with upper-secondary or above education and a monthly personal income of about $22,500. A typical Hong Kong retail derivatives investor is a 37-year-old white-collar worker with at least some tertiary education and a monthly personal income of $22,500.

The median number of stock transactions conducted by stock investors was two in 2002, down from three in each of the years 1999 to 2001 and 10 in 1997. The median number of derivatives transactions conducted by derivatives investors in 2002 was six.

Twenty-seven per cent of stock investors were online stock traders who had traded stocks in 2002 via online media, either always or sometimes, up significantly from 18 per cent in 2001 and 7 per cent in 2000. Thirty per cent of derivatives investors were online derivatives traders who had traded derivatives in 2002 via online media, either always or sometimes.

Compared to non-online stock traders, online stock traders comprise a larger proportion of younger persons, persons with higher education level and persons with higher employment status.

The majority of stock investors agreed that the Hong Kong stock market is a fair and orderly market, the regulation of brokers is effective, market information available is good and the regulation of listed companies is effective, while less than one-third disagreed.

Almost half of stock investors agreed that listed companies have good disclosure of information, investors are well protected and HKEx gives priority to the public interest, while 35 to 40 per cent disagreed.

The survey also found stock investors were divided over whether the regulation of insider trading is effective: 40 per cent agreed and 40 per cent disagreed.

The majority of derivatives investors agreed that the Hong Kong derivatives market is a fair and orderly market, the regulation of derivatives brokers is effective, good information is available for trading in the Hong Kong derivatives market, HKEx gives priority to the public interest and derivatives investors are well protected.

The findings on investors' perceptions of HKEx markets echo HKEx's submissions to the Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure and the Standing Committee for Company Law Reform that call for strengthened legislation regarding investor remedies and market quality.

The retail investor survey has been conducted periodically since 1989 by HKEx or the Stock Exchange, which is now a wholly-owned subsidiary of HKEx. Full-scale retail investor surveys are conducted approximately triennially; in each of the intervening years starting from 1999, omnibus surveys have been conducted to gather key statistics only. In the Omnibus Retail Investor Survey 2002, 2,004 individuals were interviewed by telephone. The last full-scale survey was conducted in December 2001.

A full report of the Omnibus Retail Investor Survey 2002 and reports on past surveys are available on the HKEx website ( http://www.hkex.com.hk/eng/stat/research/research.htm).

Attached are selected findings of the survey presented in charts and tables.