A survey conducted by Hong Kong Exchanges and Clearing Limited (HKEx) in December 2003 revealed that the number of Hong Kong retail investors investing in stocks and/or derivatives traded on HKEx is close to one million and stock investors traded twice as frequently in 2003 as in 2002.

The Omnibus Retail Investor Survey 2003 revealed that:

A typical Hong Kong retail stock investor is a 42-year-old white-collar worker with matriculation or above education and a monthly personal income of about $18,750. A typical Hong Kong retail derivatives investor is a 37-year-old white-collar worker, with tertiary or above education and a monthly personal income of $22,500.

The median number of stock transactions conducted by stock investors was four in 2003, up from two in 2002. The median number of derivatives transactions conducted by derivatives investors in 2003 was five, down from six in 2002.

Twenty-one per cent of stock investors were online stock traders who had traded stocks in 2003 via online media, either always or sometimes. The proportion was down from 27 per cent in 2002. Twenty-six per cent of derivatives investors were online derivatives traders who had traded derivatives in 2003 via online media, either always or sometimes. The proportion was down from 30 per cent in 2002.

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 work status; online stock traders also had a higher median monthly personal income than non-online stock traders.

Perceptions of the Hong Kong stock market had generally improved since 2002. The majority of stock investors agreed that there was good trading information available in the Hong Kong stock market, the Hong Kong stock market was a fair and orderly market and listed companies had good disclosure of information.

About half of stock investors agreed that the regulation of stock brokers was effective, the regulation of listed companies was effective and stock investors were well-protected. A higher proportion of stock investors agreed than disagreed that there were enough good quality listed companies available for investment and the regulation of insider trading was effective.

The majority of derivatives investors agreed that there was good information available for trading in the Hong Kong derivatives market and the derivatives market was a fair and orderly market. About half of derivatives investors agreed that the regulation of derivatives brokers was effective and derivatives investors were well-protected.

The retail investor survey has been conducted periodically since 1989. Full-scale retail investor surveys are conducted from time to time; in each of the intervening years starting from 1999, omnibus surveys with a narrower scope of study have been conducted to gather key statistics only. In the Omnibus Retail Investor Survey 2003, 2,004 individuals were interviewed by telephone.

A full report of the Omnibus Retail Investor Survey 2003 and reports on past surveys are available on the HKEx website at:http://www.hkex.com.hk/eng/stat/research/research.htm.

Attached are selected findings of the survey presented in charts.

[1]It should be noted that the statistics on derivatives investors are relatively less precise due to the small sample of derivatives investors obtained.

Figure 1. Trend of stockownership and stock investment

Notes:

Stockowners: Individuals who were holding stocks (including shares, warrants and Exchange Traded Funds) traded on the HKEx securities market at the time of the interview.

Stock investors: Individuals who were holding stocks at the time of the interview or had traded stocks on the HKEx securities market during the 12 months preceding the interview.

Figure 2. Trend of derivatives investment

Note:

Derivatives investors: Individuals who were holding futures or options traded on the HKEx derivatives market at the time of the interview or had traded derivative products on the HKEx derivatives market during the 12 months preceding the interview.

Figure 4. Trend of stock investors as online stock traders

Note:

Minor amendments were made to the definition of online stock traders in the past surveys. Such amendments are expected to have little material impact on the comparability of the findings.

Figure 5. Perceptions ofHong Kongstock market (2003 and 2002)

* The question was "There is good information available for trading in theHong Kongstock market"in 2002 survey.

n.a.: Not available

Note: Numbers may not add up to 100 per cent due to rounding.

Figure 6. Perceptions ofHong Kongderivatives market (2003 and 2002)

Note: Numbers may not add up to 100 per cent due to rounding.