HKEX Posts 40% Uptick in Trading Volumes, Will Launch New Trading Platform

The Orion Trading Platform will go live in mid-2019

The Stock Exchange of Hong Kong (HKEX) released its trading volumes for the first nine months of 2018 this Friday. According to HKEX’s report, the exchange has seen a significant uptick in trading volumes in both its securities and derivatives markets this year.

Up to the end of September of 2017, HKEX saw a daily average of $82 billion in trading on its securities markets. For the same period this year, the exchange reported an average daily volume of $114.7 billion – an approximately 40 percent year-on-year increase.

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Unsurprisingly, the amount of funds raised on the exchange also grew significantly. In the first nine months of this year, HKEX-listed firms raised $445.9 billion. That was a 41 percent increase over the last year when the equivalent figure was $316.6 billion.

In the derivatives markets, things were equally positive for HKEX. The average daily turnover of futures and options for the first nine months of 2018 was 1,197,645 contracts, an increase of 45 percent when compared with the 823,469 contracts for the same period last year.

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HKEX Derivatives

Looking at them in percentage terms, equity index futures performed even better. Up 67 percent on last year’s 294,951 contracts, the first nine months of 2018 saw an average daily turnover of 493,358 equity index futures.

There are a couple of reasons behind this impressive growth. Firstly, increased volatility in the first quarter of 2018 saw a global uptick in trading activity as investors sought to capitalize on fluctuating prices.

More specific to HKEX was a reasonably large increase in the number of companies listed on its exchange. At the end of September 2017, there were 2069 firms listed on HKEX. This year that number had increased by almost ten percent to 2268.

A New Trading Platform for HKEX

Friday’s trading volumes report was accompanied by a notice that HKEX will introduce a new trading platform for Northbound Trading – i.e. trading to Mainland China – called the Orion Trading Platform. Replacing the existing China Stock Connect System, HKEX plans to launch the new trading platform in mid-2019.

According to the firm’s statement, the new system will support increased trading capacity requirements. The plans are part of an effort to boost trading amongst China Connect Exchange Participants. China Connect Exchange is a collaboration between the Hong Kong, Shanghai and Shenzhen Stock Exchanges that allows international and Mainland Chinese investors to trade securities in each other’s markets through the trading and clearing facilities of their home exchange.

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