Exchanges Benefit from Record Volumes

Market volatility escalated and trading volumes set new record highs this week, totaling 10.59 billion shares on the three major stock exchanges on July 26 alone. That was 34% above the previous record from earlier this year and a sign of increasing skittishness among investors. The heightened volatility comes as investors digest mounting evidence of a credit crunch and deeper housing market woes that could spell trouble for the broader economy in the months ahead. The 4.9% drop this week in the Standard & Poor's 500-stock index was its biggest decline since September, 2002, while the NASDAQ composite index and Dow Jones industrial average logged their largest losses since March. However, bucking the downdraft were shares of major exchange companies such as Chicago Mercantile Exchange (CME), the New York Stock Exchange Euronext (NYX), and the InterContinental Exchange (ICE), which rose on July 27 on news of the record volumes.

HK's finance know-how benefits China

These days you cannot talk about global finance without talking about China. China is the world's fastest growing large economy, has the world's largest population, and is increasingly becoming more open and accessible to international business.

There are also a growing number of investors in the Mainland with a considerable appetite for making money. Many of these investors are looking further afield, many to Hong Kong, for the tools to make their next investment.
Hong Kong is already a global financial centre. We already have the institutional software, the market infrastructure, the knowledge bank, and the entrepreneurial flair to operate effectively on a local, regional and international level.

One example is our banking sector. Hong Kong has been a magnet for bankers for many years, and is now home to about 70 of the world's 100 largest banks. A high standard of transparency and disclosure, and zero tolerance towards corruption, are high on the list of reasons why banks like Hong Kong.

It is not just international banks that have a fondness for this city. Mainland banks have been hitting the headlines recently with some high-profile listings on our stock market. These include the Bank of China, the Bank of Communications and Industrial & Commercial Bank of China. They have tapped Hong Kong's market for capital and know-how. They are predominantly domestic banks now. They may well become global banks in the future.