Local retail participation in the Hong Kong stock market remained high in number terms and in percentage of adult population, according to the Retail Investor Survey 2014 conducted by Hong Kong Exchanges and Clearing Limited (HKEx). The survey also found that retail investors in general had traded more in value terms, both per transaction and in aggregate for the year, in the Hong Kong stock market than they did in 2011.
The survey, which was conducted during the period from 12 November to 23 December 20141, found that about 2.25 million Hong Kong adults, representing 36.2 per cent of the Hong Kong adult population, are stock investors2, topping the 35.7 per cent of the previous survey. The survey found that 36.4 per cent of Hong Kong adults are retail investors, ie individuals who participate in the HKEx securities or derivatives (ie futures and options) markets or both. The usage of online stock trading continued to grow and banks remained the major stock trading channel, the survey findings showed.
Key findings of the survey include:
| (1) |
36.2 per cent of Hong Kong adults (or 2,253,000 individuals) were stock investors (individuals who were holding stocks at the time of the interview, or had traded them in the 12-month period preceding the interview), up from 35.7 per cent in 2011.
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| (2) |
34.5 per cent of Hong Kong adults (or 2,147,000 individuals) were stockowners (individuals who were holding stocks at the time of the interview). The median stockholding value among all stock investors (including non-stockowners) was $200,000. The median number and value of listed company shareholdings among all stock investors (including non-shareowners) were four and $150,000 respectively.
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| (3) |
30.5 per cent of stock investors invested in Exchange Traded Funds (ETFs), up significantly from 20.9 per cent in 2011; 9.1 per cent invested in warrants3 and 4.5 per cent invested in Callable Bull/Bear Contracts (CBBCs). Collectively about 10 per cent of stock investors invested in warrants and/or CBBCs.4
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| (4) |
About 2 per cent of Hong Kong adults (or 100,000 individuals) were derivatives investors. 5
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| (5) |
Among stock investors, 80 per cent were stock traders (ie had traded stocks in the 12-month period preceding the interview).
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| (6) |
73 per cent of stock traders were online stock traders (individuals who had traded stocks via online media during the 12-month period), up from 69 per cent in 2011, while 84 per cent of derivatives investors were online derivatives traders (individuals who had traded derivatives via online media during the 12-month period), up from 67 per cent in 2011.
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| (7) |
About 71 per cent of stock traders had traded solely through banks, down from 74 per cent in 2011, and 20 per cent solely through broker firms, up from 18 per cent in 2011. About 70 per cent of derivatives traders had traded solely through broker firms, up from 59 per cent in 2011, and 28 per cent solely through banks, down from 34 per cent in 2011. |
The typical Hong Kong retail stock investor during the survey period was 47 years old, with tertiary or above education, a monthly personal income of about $22,500 and a monthly household income of about $45,000. The typical Hong Kong retail derivatives investor was 42 years old, with tertiary or above education, a monthly personal income of about $35,000 and a monthly household income of about $75,000.
In median terms, stock investors traded as frequently in 2014 but with a larger deal size than in 2011. The median number of stock transactions of all stock investors (including non-trading stock investors) in the 12-month period was six, the same as in 2011, and the median average value per stock transaction among stock traders was $50,000, up from $40,000 in 2011. The median implied total stock transaction value per stock trader in the 12-month period was $500,0006, up from $400,000 in 2011.
In median terms, derivatives investors traded less frequently in 2014 than in 2011 but with a similar deal size. The median number of derivatives transactions in the 12-month period was 6, down from 12 in 2011 (see the note to Table 2), and the average contract volume per derivatives transaction had a median of two, the same as in 2011. Nonetheless, the median implied total contract volume per derivatives investor in the 12-month period was 48, compared to 40 in 2011.6
Compared with non-online stock traders, online stock traders tended to be younger, with higher education level, higher work status, higher monthly personal and higher monthly household income. They also tended to trade stocks more frequently and to trade mainly through banks.
Stock traders who traded mainly through broker firms tended to trade more frequently than those who traded mainly through banks (a median number of stock transactions of 16 vs 10). They also tended to be older and hold a larger stock portfolio.
Stock investors were generally positive about all aspects of the Hong Kong stock market assessed in the survey (each with a mean score above 4 on a 7-point scale, with 1 being strongly disagree and 7 being strongly agree) and to a stronger degree than in 2011. Derivatives investors were also generally positive about the various aspects of HKEx's derivatives market (all aspects assessed had mean scores above 4). Retail investors were also positive when asked whether "HKEx gives priority to the public interest" (a mean score of 4.80).
The Retail Investor Survey has been conducted periodically since 1989. In the Retail Investor Survey 2014, 2,271 individuals were interviewed by telephone.
The full report and key findings on the Retail Investor Survey 2014 and reports on past surveys are available on the HKEx website.
Attached are selected findings of the survey presented in tables and charts.
| 1 |
The terms "Dec 2014" or "2014" are used in text, tables and charts for easy reference only. |
| 2 |
Please see notes on page 3 for definitions of "stock investors", "stocks" and other key terms. |
| 3 |
Warrants include equity warrants and derivative warrants. |
| 4 |
"Investing" means holding the kind of securities at the time of the interview or had traded them in the 12-month period preceding the interview. |
| 5 |
"Derivatives" refer to futures or options traded on HKEx's derivatives market. The statistics on derivatives investors are subject to relatively large error due to the small size of the sample of derivatives investors. |
| 6 |
Please refer to the survey report for the detailed calculation method. |
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Definitions: |
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1. |
Stocks: Products listed or traded on the HKEx securities market, including shares, warrants, ETFs, CBBCs, Real Estate Investment Trusts and other securities. |
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2. |
Stockowners: Individuals who were holding stocks at the time of the interview. |
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3. |
Stockholding: Holding any HKEx securities market product at the time of the interview. |
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4. |
Stock investors: Individuals who were, at the time of the interview, holding stocks listed or traded on the HKEx securities market, or had traded them in the 12-month period preceding the interview. |
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5. |
Shareowners: Individuals who were, at the time of the interview, holding equities (ie shares of listed companies) listed or traded on HKEx. |
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6. |
Listed company shareholdings: Holdings of company shares listed or traded on HKEx at the time of the interview. |
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7. |
Stock traders: Individuals who had traded stocks listed or traded on the HKEx securities market in the 12-month period preceding the interview. |
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8. |
Derivatives investors: Individuals who were, at the time of the interview, holding futures or options traded on the HKEx derivatives market, or had traded them in the 12-month period preceding the interview. |
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Findings on derivatives investors are subject to relatively large error due to the small size of the sample for them in the survey. Therefore, caution is needed in interpreting the findings on this investor type. |
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The survey assesses retail investors' perceptions of certain aspects of the securities and derivatives markets operated by HKEx. Areas of assessment include those which would largely be outside the responsibility of HKEx, such as the regulation of brokers and the regulation of insider trading. |
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"Stock market" and "securities market" are interchangeable and refer to shares, bonds, funds, warrants, CBBCs and other products traded on The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of HKEx. |