May

30

The Hong Kong Stock Market, from Victor Niederhoffer

May 30, 2016 |

2 Comments so far

1. henry on May 31, 2016 1:02 pm

   enjoy this website very much, pls tell us a bit more about the market, thanks !

2. drd on June 9, 2016 6:40 am

   V,

   Where does the path to automation appear here…?

   —–

   “David Webb, independent non-executive director of the Exchange since 2003, has been arguing for a super regulatory authority to assume that role as regulator, as there is inherent conflict between its commercial and regulatory roles. In the meantime, he argues for improved investor representation on the Hong Kong Stock Exchange.

   In 2007, the uproar by smaller local stockbrokers over the decision by board of directors to cut minimum trading spreads for equities and warrants trading at between 25 HK cents and HK$2 caused the new board to vote to reverse the decision. The reforms were to be implemented in the first quarter, but was put back on the table following protests by brokers. Webb criticised the board for caving in to vested interests.[14]

   —–

   The exchange first introduced a computer-assisted trading system on 2 April 1986.[12] In 1993 the exchange launched the “Automatic Order Matching and Execution System” (AMS), which was replaced by the third generation system (AMS/3) in October 2000.[13]”

   https://en.wikipedia.org/wiki/Hong_Kong_Stock_Exchange

   Of interest…

   Stanley Kwan, a banker whose 1969 creation, the Hang Seng index, became a widely used gauge for the Hong Kong Stock Exchange, died on Dec. 31 in Toronto. He was 86.

   His death was confirmed by the R. S. Kane Funeral Home.

   The Hang Seng index is “the ultimate capitalist measure of Hong Kong,” Robert Nield, president of the Hong Kong branch of the Royal Asiatic Society, wrote in a foreword to Mr. Kwan’s 2008 book, “The Dragon and the Crown: Hong Kong Memoirs.”

   Mr. Kwan, who joined Hang Seng Bank in 1962, saw the index he created mirror the growth pains of Hong Kong. It crashed during the 1974 world oil crisis and the 1983 impasse between China and Britain over the handover of Hong Kong, and it benefited from the opening up of the Chinese mainland.

   The index’s 48 members now include Industrial and Commercial Bank of China, the world’s largest lender by market value, and the PetroChina Company, Asia’s biggest company by market value.

   As Mr. Kwan recalled in his book, the bank’s chairman, Ho Sin Hang, and general manager, Q. W. Lee, decided late in 1969 “that they needed a measure of the performance of the stock market for their own as well as their customers’ reference.” Mr. Ho, he said, spoke of creating the “Dow Jones industrial average of Hong Kong.”

   Mr. Kwan, who headed the bank’s research department, worked with a staff of seven to create the Hang Seng index and consulted government and university statisticians and economists. The index made its debut on Nov. 24, 1969.

   Stanley Shih Kuang Kwan was born on Jan. 10, 1925, in Hong Kong to a banking family, according to the funeral home. A survivor of the Japanese occupation of Hong Kong during World War II, he was a wartime interpreter for United States troops in mainland China before starting his banking career.

   His survivors include two daughters.

   Mr. Kwan, who retired to Canada, was humble about his place in history.

   “If I walked into the Hang Seng Bank head office today,” he told The Toronto Star in 2010, “no one would know me.”

   http://www.nytimes.com/2012/01/11/business/global/stanley-kwan-hang-seng-index-creator-dies-at-86.html?_r=0

   —–

   For purposes of modeling, how does one distinguish Webb’s rules-based agenda and Kwan’s “needed a measure of the performance of the stock market” to automation trends from 5 to 75%+ both there and here?

   Is there a sucker for linear modeling or merely the dragon of quantitative ballyhoo?

   dr