The Strategist

Hong Kong stock exchange quadruples London's trading volume

02/18/2021 - 02:40

According to the FT calculations, since the beginning of the year the average daily turnover of shares on the Hong Kong Stock Exchange (HKEX) was about $25 billion, four times that of the London Stock Exchange (LSE) over the same period.

Analysts explain it with the fact that trading volume in Hong Kong increased markedly at the start of the year due to the ongoing recovery of business activity in Asia. 

At the same time, Brexit resulted in reduction in trading on the LSE, which has partly shifted to exchanges in continental Europe. In January, for example, for the first time in modern history, the Amsterdam exchange outperformed the London exchange in terms of stock trading volumes. 

Following the signing of the agreement on the UK's exit from the EU, the European Commission imposed restrictions on the trading of shares in London for companies registered in the EU. As to date, the EU and the UK have not yet signed an agreement on separate recognition of the regulatory status of the UK stock exchanges.

At the same time, investor activity on the Hong Kong Stock Exchange and major new listings have led to average daily turnover on HKEX rising 2.5-fold since the beginning of last year (from $10bn to $25bn), approaching the level of the world's largest stock exchange, New York Stock Exchange, where average daily turnover in February was $44bn.