The Stock Exchange of Hong Kong

NEWS RELEASE
March 9, 1999

The Stock Exchange of Hong Kong's latest Members Transaction Survey shows that the contribution of local individual trading decreased from 53 per cent in 1997 to 41 per cent in 1998 but remained the largest component of total market turnover.

The survey covered the period from October 1997 to September 1998 and received an excellent response rate of 99.7 per cent from the Members surveyed.

Local investors, both individuals and institutions, contributed 63 per cent of turnover while overseas investors, mostly institutions, contributed 32 per cent, up from 22 per cent in 1997.

Overseas participation originated mainly from the United Kingdom (44 per cent) and the United States (25 per cent) and as in previous surveys, were the two largest sources of overseas investment money. The contribution of the United Kingdom has been increasing from the 32 per cent in 1996, and that of the United States has been decreasing from the 32 per cent in 1995.

Matthew Harrison, Executive Director of the Exchange's Research and Planning Division, said survey findings over the past eight years showed that retail participation was much more sensitive to changes in market sentiment than institutional participation.

"Retail participation reduces at a higher rate when the market is bearish, such as in 1998 and 1995, and increases much faster than institutional participation when the market turns bullish, as in 1997," he said.

"The survey findings also show that overseas institutional investors' participation is relatively stable and important for our market," Mr Harrison said.

The Exchange conducts the Members Transaction Survey annually. The 1998 survey sample comprised 311 Members representing all Members constituting the top two-thirds of market turnover and a random sample of about 60 per cent of the rest.

Copies of the Members Transaction Survey 1998 will be distributed to the media.

Corporate Communications Department

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