HKEx/SFC: Dealing Costs

Articles: HKEx/SFC: Dealing Costs

HKEx keeps wide spreads
The Board of HKEx (0388) today decided to keep wide bid-offer spreads for stocks below $5, cancelling its plan to improve market efficiency after intense lobbying by some small brokers, who also campaigned against the elimination of minimum commissions in 2000-2002. Once again in Hong Kong, political expediency trumps logic and commitment. We call on good companies to now distinguish yourselves by consolidating your shares to get into the efficient price zone above HK$5. (14-Feb-07)

Cut the Spread!
We need your help! Please use our form to support the reduction of minimum bid-offer spreads on HKEx. This will improve market efficiency and make it easier for buyers and sellers to meet. If you don't support it now, it will be many years before you have another chance. (4-Oct-04)

Commission Deregulation: No More Delays
How ironic that in a week in which Hong Kong was again named the World's freest economy, the Government was talking about further delaying the abolition of minimum commissions to protect the inefficient small broker cartel. So much for letting the market pick winners. If the Government believes in free markets, it must allow brokers and clients to negotiate their rates. (13-Nov-02)

Government Backs Cartel
In a move which highlights the fallacy of its claim to promote a free market economy, the HK Government has told HKEx, whose board it controls, to delay plans to scrap the minimum commission rule. We look at the wider aspects of what this says for competition policy in Hong Kong, and at the way vested interests dominate the debate on market reforms when investor representation is absent. We call again for the government to adopt the HAMS Proposal. (24-Jan-02)

Cut the Spread
From 1-Apr-02, Hong Kong brokerage rates will be negotiable, as they should be in a free market. Now it's time to focus on another inefficiency - HK's gaping spread table, which keeps an artificially wide gap between the bid and offer. Webb-site.com calculates that the average spread in the table is 0.78%, and even the HSI stocks have an average spread of 0.47%. We calls on regulators to cut the spread table to no more than 0.1%, and we explain how to achieve this. (6-Jan-02)

Smoking Gun
Webb-site.com has obtained a letter which provides an exclusive look at Legislator Henry Wu's anti-competitive attempt to maintain the brokerage cartel's fixed commission rates. In other jurisdictions, this kind of collusion and price-fixing would be illegal. Hong Kong badly needs a competition law. (5-Nov-01)

Scrap the Cartel
Small brokers are launching a last-ditch effort to continue the indefensible minimum commission rate set by the SEHK, due to be scrapped on 1-Apr-02. Webb-site.com urges the Government to ignore them - the market is run for customers, not for brokers. Let the competition begin! (31-Oct-01)

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