Regulatory reform in an emerging stock market: The case of Hong Kong, 1945-86

Financial History Review

Volumn 11, Issue 2, 2004, Pages

  Schenk, Catherine R ^a  

^a UNIVERSITY OF GLASGOW   (United Kingdom)

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EID: 10644277799     PISSN: 09685650     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0968565004000113     Document Type: Review

References (82)

1. L. C. Chau, 'Foreign investment in the Hong Kong stock market', in Foreign Investment in Asian Stock Markets, United Nations (1996), pp. 19-21.
2. C. R. Schenk, 'Finance of Industry in Hong Kong 1950-70: a case of market failure?' Business History (forthcoming, 2004).
3. For bank regulation see C. R. Schenk, 'Banking crises and the development of bank regulation in Hong Kong', Australian Economic History Review, 44 (2004) and C. R. Schenk, Hang Kong as an International Financial Centre (London, 2001), ch. 3.
4. For bank regulation see C. R. Schenk, 'Banking crises and the development of bank regulation in Hong Kong', Australian Economic History Review, 44 (2004) and C. R. Schenk, Hang Kong as an International Financial Centre (London, 2001), ch. 3.
5. R. C. Michie, The London Stock Exchange; a History (Oxford, 1999), p. 559.
6. Parts of this section draw on Schenk, Hong Kong, pp. 107-14.
7. Interview with Mr Francis R. Zimmern, member of the HKSE from its inception and chairman 1972-7, 14 November 1996. Hong Kong Stock Market History Project, Centre for Asian Studies, University of Hong Kong.
8. Letter from J. H. Taggart to Arthur Morse (HSBC), 8 July 1945. Public Records Office, Hong Kong (hereafter HKRS) 211/2/22.
9. Manuscript memo by N. L. Smith, 17 August 1945. HKRS 211/2/22.
10. Interview with Zimmern.
11. Y. C. Jao, Banking and Currency in Hong Kong (London, 1974), p. 88.
12. Report of the Industrial Bank Committee (Hong Kong, 1960), p. 5.
13. Interview with Zimmern.
14. Shares in Hong Kong, Hong Kong Stock Exchange, pp. 55-6.
15. The 'Sticking List' which set the negotiable amount of shares for each listing was published in the for Eastern Economic Review (hereafter FEER), 16 April 1947, p. 189.
16. 'Stock Market Report', Hong Kong Exporter (1962), pp. 89-93.
17. I b i d.
18. K. A. Wong, 'The Stock Market in Hong Kong; a Study of its Functions and Efficiency', (Unpublished PhD thesis, University of Liverpool, 1975), pp. 83-4.
19. Shares in Hong Kong, HKSE, pp. 57-8.
20. Nigel Ruscoe's Annual Hong Kong Register, 1963, p. 207.
21. For a list of the companies see FEER, 3 January 1963, p. 43.
22. Jao, Banking and Currency.
23. FEER, 28 March 1975.
24. Quoted in FEER, 28 March 1975.
25. FEER, 27 Nov 1969.
26. Letter from financial secretary to the FEE, 29 April 1970, 9 January 1971, 30 March 1971. Archive of the Far East Exchange, University of Hong Kong (hereafter FEE) Box 32/1.
27. Haddon-Cave to FEE, 13 September 1971. Reply from Li to Haddon-Cave 17 September 1971. Reply from Haddon-Cave to Li, 21 October 1971. FEE Box 32/1.
28. The FEE and the KNE also broke with HKSE tradition by allowing women brokers to become members. FEER 25 December 1971.
29. Minutes of the General Committee Meetings FEE, 28 January 1970 and 4 March 1970. FEE Box 81/4. For an account of the Gold and Silver Exchange see C. R. Schenk, 'The Hong Kong gold market and the Southeast Asian gold trade in the 1950s', Modern Asian Studies, 29 (1995). pp. 387-402.
30. The Kowloon Stock Exchange Limited, 1972.
31. FEER, 13 November 1971.
32. FEER, 25 December 1971.
33. View of the securities commissioner, Uisdein Innes, reported in the FEER, 13 June 1980.
34. Far East Exchange Ltd Yearbook, 1979.
35. Far East Exchange Ltd Yearbook, 1973.
36. Kam Ngan Stock Exchange Ltd, 10th Anniversary 1971-1980.
37. The commercial/industrial index was comprised of the major merchant hongs such as Jardines, Hutchison, Swire Pacific and Wheelock as well as GI Cement, San Miguel, Lap Heng, Stelux and Zung Fu. 'Investments' included four investment companies. 'Land and construction' included 13 companies.
38. Chau, 'Foreign investment', p. 19.
39. Far East Exchange Ltd Yearbook, 1972.
40. R. Barrie and G. Tricker, Shares in Hong Kong: 100 Years of Stock Exchange Trading, Stock Exchange of Hong Kong Ltd (Hong Kong, 1991), p. 78. An almost identical account is found in A. Rowley, Asian Stockmarkets: the Inside Story (Homewood, IL, 1987), p. 132.
41. R. Barrie and G. Tricker, Shares in Hong Kong: 100 Years of Stock Exchange Trading, Stock Exchange of Hong Kong Ltd (Hong Kong, 1991), p. 78. An almost identical account is found in A. Rowley, Asian Stockmarkets: the Inside Story (Homewood, IL, 1987), p. 132.
42. Chairman's Report, Far East Exchange Ltd Yearbook, 1972.
43. Wong notes that until this time 'neither the disclosure of authorised, issued and paid-up capital was clearly stated, nor was the disclosure of the nature of the business, the purpose of the issue, or the consolidated accounts of an issue made by a holding company required'. Wong, 'Stock Market', p. 180.
44. Barrie and Tricker, Shares in Hong Kong, p. 74.
45. For the main features of the Ordinance see T. K. Chose, The Banking System of Hong Kong (Singapore, 1987), pp. 80-2.
46. Citation of fire officer, 11 January 1973. FEE Box 119/1. The FEER reported that the government had sent the firemen into the exchanges to curb speculative interest created by the crowds. FEER 19 February 1973.
47. This was followed on 20 August 1973 by the discovery of forged Hutchison shares and in September by Lee Hing and Mei Hon and OOC forgeries.
48. PPK Ng, executive vice chair of the FEE asked Hang Seng Bank to include the FEE in the Hang Seng Index but this was refused on the basis that more than one index for similar stocks was confusing to investors. See correspondence March 1970 to April 1971. FEE Box 10/6.
49. Kam Ngan Stock Exchange Ltd Yearbook, 1977.
50. Far East Exchange Yearbook, 1975.
51. Letter from P. C. Woo on behalf of Far East Stock Exchange Ltd to financial secretary 30/7/71, HKRS 229/1/960.
52. Letter from Haddon-Cave to P. C. Woo, 17/11/71. HKRS 229/1/960.
53. On bank regulation in Hong Kong see Schenk, 'Banking crises'.
54. Letter from P. C. Woo on behalf of Far East Stock Exchange Ltd to financial secretary 30/7/71. HKRS. 229/1/960. The number of registered companies is from R. Fell, Crisis and Change: the Maturing of Hong Kong's Financial Markets, 1981-1989 (London, 1992), pp. 38-9.
55. Report of the Companies Law Revision Committee quoted in Fell, Crisis, p. 41.
56. Letter from A. H. Potts, chair of HKSE to R. Li, 20 September 1971. FEE Box 112/9.
57. Ibid. Michie describes the foundation of the Federation of Stock Exchanges in Great Britain and Ireland in 1965 as an unsuccessful step toward unification of exchanges by the LSE. Michie. London, pp. 459-60.
58. Ibid. Michie describes the foundation of the Federation of Stock Exchanges in Great Britain and Ireland in 1965 as an unsuccessful step toward unification of exchanges by the LSE. Michie. London, pp. 459-60.
59. Memo for Proposed Federation of Exchanges (draft), 12 April 1972. FEE Box 112/9.
60. FEER, 30 October 1971, p. 49.
61. Minutes of a General Committee Meeting, Far East Exchange, 19 May 1972. FEE Box 10/6.
62. When presenting his draft proposals to R. Li, Selwyn (securities commissioner) remarked that the need was no longer so pressing. Selwyn to Li, 17 September 1973. FEE Box 34/1.
63. FEER, 22 Oct 1973, p. 62.
64. Barrie and Tricker, Shares in Hong Kong, p. 85.
65. Fell, Crisis, pp. 44-6. Fell's book is a personal account of his time as banking commissioner and securities commissioner in Hong Kong.
66. Letter from J. B. Selwyn to Kam Ngan Stock Exchange, 15 January 1976. FEE Box 34/1.
67. FEER, 96 no. 18, 6 May 1977, p. 60.
68. On 6 April, Woo Hon-fai, chair of the Kam Ngan Exchange, wrote to Li on hearing of the merger talks between HKSE and FEE asking to be included. Letter from Woo Hon Fai to Li, 6 April 1977. FEE Box 58/11.
69. Letter from R. A. Witts to R. Li, 26 April 1977. FEE box 58/11.
70. Letter from P. P. F. Chan, KSE, to Securities Commission, 27 April 1977. FEE Box 58/11.
71. Chairman's Report, Far East Exchange Yearbook, 1977.
72. Letter from Peter P. F. Chan (KSE) to R. Li (FEE), 5 May 1977. FEE Box 10/6.
73. Letter R. Li to Peter P. F. Chan, FEE Box 10/6.
74. FEER, 29 Jul 1977, p. 50. These were also the obstacles described by Li in his chairman's report. Far East Exchange Yearbook 1977.
75. FEER, 29 Jul 1977, p. 50. These were also the obstacles described by Li in his chairman's report. Far East Exchange Yearbook 1977.
76. Letter from P. F. P. Chan to members of the Federation of Stock Exchanges. 8 November 1977. FEE Box 111/3.
77. Meeting of the Working Party for Unification, 28 November 1977. FEE Box 111/3.
78. Fell, Crisis, pp. 48-54.
79. An account of the case is available on the ICAC website, www.icac.org.hk as one of the ICAC's landmark cases.
80. This phrase is attributed to Nicholas Goodison, chairman of the London Stock Exchange, on a visit to Hong Kong in September 1987. Fell, Crisis, p. 224.
81. Report of the Securities Review Committee (May 1988), ch. 3.
82. Ibid., ch. 1.