13 September 2021
When it comes to global markets, the US stock market has a commanding lead over its rivals. When talking about the US stock market, we usually refer to both the New York Stock Exchange (NYSE) and Nasdaq. More trade execution takes place on these two exchanges than any of their global rivals.
The Hong Kong Exchange is the fifth largest exchange globally, some way behind its US rivals but more prominent than any of its European counterparts.
Increasingly, Chinese exchanges are becoming more attractive to global investors. Here we’ll take a closer look at how the US and Hong Kong exchanges compare. What do they each offer investors and traders?
The New York Stock Exchange (NYSE) is way out in front when it comes to size. Over 2,400 companies are listed on it, including a range of blue-chip companies and US household names such as Walt Disney, Berkshire Hathaway, Coca-Cola and Walmart.
Its cumulative market capitalisation stands at over $26 trillion and sees huge trade execution volumes daily.
The second-largest exchange in the world is Nasdaq. Also located in New York, it has more stocks listed than NYSE, but these are often smaller and more insurgent, including tech giants such as Amazon, Google and Microsoft. Its overall capitalisation value stands at $19 trillion.
Founded in 1891, Hong Kong is home to the Hang Seng Index. It has an overall capitalisation of $6 trillion and large trade execution numbers every day. There are now over 2,500 companies listed on the exchange, including some of China and Asia’s biggest names, including Tencent Holdings, AIA and PetroChina. It has grown and evolved throughout its long history, and from the mid-1990s, it began listing state-owned Chinese enterprises.
As the US markets contain listings worldwide, it might be tempting to concentrate your trading activities purely on US markets. However, the Hong Kong stock market can give you a range of advantages. Not least, it gives you access to a wider range of companies, particularly those located in China and the broader Asia-Pacific region.
With China beginning to challenge the US as the global economic superpower, traders’ and investors’ potential to capitalise on this growth is great. Hong Kong has advantages over the Shanghai and Shenzhen exchanges for overseas investors. Culturally, Hong Kong is Chinese but has strong global links with the West due to its history and location.
Trade execution services located in the territory will often reflect this, with brokerages having global connections to the US, UK and beyond.
If you’re looking to broaden your trading activities beyond the US and Europe into Asia-Pacific, then the Hong Kong Stock Exchange is the sensible place to begin.
At GIS HK, we understand the benefits that the Hong Kong Stock Exchange can give traders. Based in the territory, we know the trading culture, providing a bridge into the Asia-Pacific region for growing numbers of global clients.
Our technology-led approach ensures low latency, and with our wealth of market knowledge, we give you the best platform for success.