Question

Are the playing fields in providing relevant financial information to the investing
public in the Hong Kong SAR leveled?

Answer 1

HONG KONG SAR

Under the one country, two sysyems principle, Hong kong is a Special Administrative Region and is separate from China in all matters except the military and foreign affairs. It is rated the most freest economy and even has a currency of its own known as the Hong Kong Dollar.

FACTS TO THE CASE

• Unlike all other parts of China, Hong Kong follows a democratic system, that has made it the financial hub of China.
• The lower rates of taxation,almost free services of trading through ports as well as an established market both domestically and internationally has invited lot of companies to be headquarted in Hong Kong.
• At the time of the transfer of soverignity, there was a steady GDP growth with almost over 2 billion population. But within the past 20 years, the population and GDP growth has slowned its pace.
• However, investors around the world look to invest in this stock exchange and it comes second after the New York stock exchange.
• Any problems in the domestic economy has not stopped investors from investing here, its true that during the crisis the investments had stagnned, but it grew afterwards.
• The major investments happening in this exchange are in property.
• The riots that happen affected the retail and tourism sectors of the country, but this stock exchange still gew- that doesn't mean it wasn't affected, but it did not get affected as much as other important sectors.
• Providing of financial information is a vital part, since that is the primary factor that an investor looks for while investing. We can see that the number of investors in China have only increased, giving an implication that they get the adequate investing information.
• The role the politics play in this cannot be ignorned, despite claiming it to be a democratic economy, it may face some political influcences.
• We can conclude that there has been political influcences and other external factors playing that are out of the control of a specific firm, but from a firms' point of view Hong Kong stock market brings in ample investing opportunities.