Hong Kong exchange adds and removes short sale securities
22 February 2013 Hong Kong
Image: Shutterstock
Twenty-seven securities will be added and six existing securities will be removed from the list of designated securities for short selling in Hong Kong.
The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), said that there will be 602 designated securities for short selling after the revision.
A sizeable amount of the 27 additional securities are investment holding and property investment firms, including Y. T. Realty, Sea Holdings and Tian Teck Land.
Among the securities deemed ineligible was Chaoda Modern Agriculture, an agricultural company that was last year alleged to have overstated its assets.
The exchange tightened the rules that regulate the short selling of designated securities in May 2012 after it conducted a review earlier in the year, insisting the reasoning behind the increased severity was only due to increased market capitalisation of Hong Kong-listed firms.
The move to tighten restrictions followed the enactment of similar legislation in the US and Europe, with the exchange planning to increase the eligibility criteria for market capitalisation and turnover velocity from HKD$1 billion to $3 billion and 40 percent to 50 percent respectively.
In a 2012 statement, the exchange said: 鈥淭he change reflects the fact that the average market capitalisation of listed companies in Hong Kong has grown by around three times and the market turnover velocity has increased from around 40 percent to over 50 percent in the past decade.鈥�
The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), said that there will be 602 designated securities for short selling after the revision.
A sizeable amount of the 27 additional securities are investment holding and property investment firms, including Y. T. Realty, Sea Holdings and Tian Teck Land.
Among the securities deemed ineligible was Chaoda Modern Agriculture, an agricultural company that was last year alleged to have overstated its assets.
The exchange tightened the rules that regulate the short selling of designated securities in May 2012 after it conducted a review earlier in the year, insisting the reasoning behind the increased severity was only due to increased market capitalisation of Hong Kong-listed firms.
The move to tighten restrictions followed the enactment of similar legislation in the US and Europe, with the exchange planning to increase the eligibility criteria for market capitalisation and turnover velocity from HKD$1 billion to $3 billion and 40 percent to 50 percent respectively.
In a 2012 statement, the exchange said: 鈥淭he change reflects the fact that the average market capitalisation of listed companies in Hong Kong has grown by around three times and the market turnover velocity has increased from around 40 percent to over 50 percent in the past decade.鈥�
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