Secondary Market Survey 2004 by jlx10672

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									Research & Planning




Secondary Market Survey 2004

May 2005
        Secondary Market Survey 2004



CONTENTS

                                                                                                                                    Page
EXECUTIVE SUMMARY .......................................................................................................... 1
1.     INTRODUCTION ............................................................................................................... 2
2.     TARGET RESPONDENTS AND METHODOLOGY.................................................. 2
       2.1 Target respondents....................................................................................................... 2
       2.2 Methodology ................................................................................................................ 2
       2.3 Limitations ................................................................................................................... 3
       2.4 Response rate ............................................................................................................... 4
3.     DEMOGRAPHICS OF RESPONDENTS ....................................................................... 5
4.     GENERAL MARKET CONDITIONS ............................................................................ 7
       4.1 Confidence in the market ............................................................................................ 7
       4.2 Attractiveness of the Main Board ............................................................................... 8
       4.3 Attractiveness of GEM................................................................................................ 9
       4.4 Attractiveness of the derivatives market .................................................................. 10
5.     TRADING, CLEARING AND SETTLEMENT........................................................... 10
       5.1 Efficiency and reliability of trading and clearing systems...................................... 10
       5.2 Market liquidity ......................................................................................................... 12
       5.3 Market depth and price efficiency in the stock market ........................................... 13
       5.4 Trading aspects in the stock options market ............................................................ 15
       5.5 Transaction costs........................................................................................................ 16
       5.6 Efficiency of transaction processes .......................................................................... 17
                     s
       5.7 Exchange’ overall risk management....................................................................... 19
6.     MARKET REGULATION .............................................................................................. 20
       6.1 Regulation and corporate governance of listed companies..................................... 20
       6.2 Regulation of market activities and investor protection ......................................... 21
       6.3 Regulation of brokers ................................................................................................ 23
       6.4 Overall regulation  local vs overseas ................................................................... 24
7.     MARKET AND ISSUER INFORMATION.................................................................. 25
       7.1 Issuer information...................................................................................................... 25
       7.2 Market information.................................................................................................... 26
8.     THE EXCHANGE’S PRODUCTS AND SERVICES ................................................. 28
       8.1 The Exchange’s products .......................................................................................... 28
       8.2 The Exchange’s clearing and settlement services.................................................... 29
       8.3 The Exchange’s fees.................................................................................................. 30
       8.4 The Exchange’s technical support............................................................................ 31
       8.5 The Exchange’s other services.................................................................................. 33


                                                                                                       Research & Planning, HKEx
                                                                                                                     12 May 2005
      Secondary Market Survey 2004

9.    OTHER MARKET SERVICES...................................................................................... 35
      9.1 Broker services .......................................................................................................... 35
      9.2 Other intermediaries’services .................................................................................. 36
10.   MAINLAND CHINA DIMENSION............................................................................... 38
11.   DEVELOPMENT PROSPECTS .................................................................................... 39




                                                                                                   Research & Planning, HKEx
                                                                                                                 12 May 2005
      Secondary Market Survey 2004

EXECUTIVE SUMMARY

Hong Kong Exchanges and Clearing Limited (HKEx) conducted the Secondary Market
Survey (SMS) 2004 on both its stock and derivatives markets. The previous survey was
conducted in 1999 on the stock (and stock options) market. The objectives of SMS2004
were to collect and assess the views of two major types of secondary market users 
Exchange Participants and local fund managers  and identify areas for possible
improvement. The responded sample consisted of 270 Stock Exchange Participants (SEPs),
90 Futures Exchange Participants (FEPs), 32 Stock Options Exchange Participants (SOEPs)
and 13 fund managers  a total of 405 respondents, representing an overall response rate of
64% out of the target population of 630.

The survey revealed overall positive views on the following:

• Confidence in the HKEx stock market and derivatives market.
• The fairness and orderliness of the markets.
• The efficiency and reliability of the HKEx’s stock and derivatives market systems.
• The attractiveness of the Main Board to invest in and to list on, and its liquidity.
• The effectiveness of the overall regulation of Main Board companies, and their corporate
  governance.
• Market transparency in terms of trading data and Main Board companies’ information
  disclosure.
• The effectiveness of stock and derivatives broker regulation, and their business conduct.
• The protection of securities and derivatives investors.
• The efficiency of the trading, clearing and settlement processes.
• Services provided by market intermediaries.
• Development prospects in the Mainland China dimension.

Areas for improvement revealed include:

• The market depth and liquidity of the Growth Enterprise Market (GEM).
• The liquidity of the stock options market.
• The corporate governance and information disclosure of GEM companies.
• The corporate governance and information disclosure of Mainland companies.




                                               -1-                       Research & Planning, HKEx
                                                                                       12 May 2005
         Secondary Market Survey 2004

1.       INTRODUCTION

         Hong Kong Exchanges and Clearing Limited (HKEx) conducted the Secondary Market
         Survey (SMS) 2004 in August to September 2004. This is the third survey in its series.
         The previous two surveys were conducted in 1996 and 1999 on the stock market by the
         Stock Exchange of Hong Kong, which is now a wholly-owned subsidiary of HKEx.
                                             s
         The SMS2004 addressed the Exchange’ derivatives market for the first time.

         The objectives of the SMS2004 were (1) to collect and assess the views of two major
         types of secondary market users  Exchange Participants and local fund managers 
         on the stock and derivatives market environments in Hong Kong; and (2) to identify
         areas for possible improvement.

         For the purpose of the survey, the “Exchange” refers to HKEx or its subsidiaries (the
         Stock Exchange of Hong Kong and the Hong Kong Futures Exchange), whichever is
                                                              s
         appropriate; the “secondary market” refers to HKEx’ stock and derivatives markets for
         the trading of securities and derivatives respectively; the “stock market” refers to the
         Main Board and GEM markets; and the “derivatives market” refers to the HKEx futures
         and options (including stock options) market.


2.       TARGET RESPONDENTS AND METHODOLOGY

2.1      Target respondents

         The secondary market user groups covered in the survey are trading Exchange
         Participants and fund management companies operating in Hong Kong. The three
         types of Exchange Participants  Stock Exchange Participants (SEPs), Futures
         Exchange Participant (FEPs) and Stock Options Exchange Participants (SOEPs)  and
         members of the Hong Kong Investment Funds Association (HKIFA) were included in
         the target population. The target population consisted of a total of 630 target
         respondents  434 SEPs, 110 FEPs, 42 SOEPs and 44 fund managers (FMs).

2.2      Methodology

         The survey was conducted by way of four separate sub-surveys in form of mailed
         questionnaires to the four types of target respondents1. This was to cater for the
         different business and market interests of the different types of target respondents. The
         four questionnaires covered common core market issues with related questions tailored
         for each respondent type.

         The survey fieldwork was conducted in August to September 2004 with survey
         questionnaires mailed to the target respondents to be completed and returned on a
         voluntary basis.

         Apart from a few basic demographic questions, the respondents were asked to express
         their views or degree of satisfaction on statements on a seven-point rating scale ranging

1
     All SOEPs were, in fact, also SEPs. These EPs have different executives responsible respectively for the cash
    market and stock options market businesses. They were sent the SEP- and SOEP-questionnaires to be filled
    in by the appropriate persons for the respective business.


                                                        -2-                          Research & Planning, HKEx
                                                                                                   12 May 2005
         Secondary Market Survey 2004

        from the most negative to the most positive. The statements covered the following
        areas in the secondary market (some areas may not apply to all respondent types):
        (1)    General market conditions
        (2)    Trading, clearing and settlement
        (3)    Market regulation
        (4)    Market (and issuer) information
        (5)    The Exchange’s products and services
        (6)    Other market services
        (7)    Mainland China dimension
        (8)    Development prospects

        For analysis purpose, SEPs and FEPs in the target population were each further divided
        into two groups ? those contributing the top two-thirds of market turnover2 (cash
        market for SEPs and derivatives (excluding stock options) market for FEPs) were
        considered to be large-sized EPs and the rest small-sized EPs. There were 28
        large-sized SEPs, 22 large-sized FEPs, 406 small-sized SEPs and 88 small-sized FEPs
        in the target population. In this report, results are presented for the overall responded
        sample and by respondent type. Significant differences (in statistical terms) found in
        the mean scores (on the 7-point rating scale) among different respondent types and
        broker size groups are highlighted in the results.

        Results on the above eight areas are presented in sections 4 to 11.

2.3     Limitations

        The survey is subject to the following limitations that should be taken into consideration
        when interpreting the findings:

        (1)    The survey did not cover all market users, for example retail or overseas
               institutional investors. Therefore, the survey findings only reflect the views of
               the four target respondent types and not all types of secondary market users.

        (2)    When interpreting the overall responses to a particular statement, different types
               of respondents have different areas of concern which may sometimes conflict.
               The overall result may be dominated by the views of a dominating respondent
               type in number, in particular, the small-sized SEPs. To avoid a misleading effect,
               analysis results by respondent type are provided.

        (3)    In some areas, there are conflicting responsibilities and duties between HKEx and
               the respondents. Such conflict may be reflected in the opinion the respondents
               gave.

        (4)    The response rate of fund managers was relatively low in comparison with those
               of other respondent types. Their responses may be less representative of the total

2
    The period for calculating the market turnover distribution for SEPs was from October 2003 to September
    2004 and that for FEPs was from July 2003 to June 2004. The periods were chosen for administrative
                                     s
    convenience in the light of HKEx’ two other transaction surveys (Cash Market Transaction Survey 2003/04
    and Derivatives Market Transaction Survey 2003/04).


                                                    -3-                         Research & Planning, HKEx
                                                                                              12 May 2005
      Secondary Market Survey 2004

            fund manager population. In particular, only a few responding fund managers
            had experience in the HKEx derivatives market. Caution must be taken when
            comparing their views with those of other respondent types and with the past
            survey results.

2.4   Response rate

      The overall response rate was 64% which is almost the same as those of the past two
      surveys. However, the response rate of fund managers was relatively low at 30%.
      For large-sized SEPs and FEPs, the response rates were 89% and 91% respectively.
      For small-sized SEPs and FEPs, the rates were 60% and 80% respectively.

                                       Figure 1.              Response rate by respondent type

                            All Respondents
                             All Respondents                                                         64% (405)


          Stock Exchange Participants (SEPs)                                                       62% (270)


                            Large-sized SEPs                                                                                   89% (25)


                            Small-sized SEPs                                                   60% (245)


                Futures Exchange Participants
                                                                                                                        82% (90)
                           (FEPs)

                            Large-sized FEPs                                                                                       91% (20)


                            Small-sized FEPs                                                                        80% (70)


          Stock Options Exchange Participants
                                                                                                                 76% (32)
                       (SOEPs)

                       Fund Managers (FMs)                                30% (13)


                                                0%      10%       20%    30%     40%   50%   60%       70%        80%        90%        100%

                                                ( ) No. of respondents




                                                                           -4-                                   Research & Planning, HKEx
                                                                                                                               12 May 2005
     Secondary Market Survey 2004

3.   DEMOGRAPHICS OF RESPONDENTS

     In the survey, the respondents were asked about whether they had traded the various
     HKEx cash and derivatives products, overseas products and the investment services
     they provided to their clients. The results are presented in Figures 2 to 4.

           Figure 2. Trading experience in the past 12 months by respondent type

                                                                                                    100% (270)
                        Main Board                             34% (31)
                         securities                                                                 100% (32)
                                                                                                    100% (13)

                                                                                              90% (243)
                                                           30% (27)
                     GEM securities
                                                                                         81% (26)
                                                                                   69% (9)

                                               11% (30)
                HSI Futures or Mini-                                                                100% (90)
                    HSI Futures                                   44% (14)
                                                           31% (4)

                                              10% (26)
               HSI Options or Mini-                                                      82% (74)
                   HSI Options                                         44% (14)
                                        0%

                                              9% (23)
                     H-shares Index                                                           90% (81)
                        Futures                                   44% (14)
                                                           31% (4)

                                             7% (20)
                     H-shares Index                                         54% (49)
                        Options                                  38% (12)
                                        0%

                                                   14% (37)
                                                      20% (18)
                       Stock options
                                                                                                    100% (32)
                                        0%

                                        1% (2)
                                         3% (3)
                             Others
                                         3% (1)
                                        0%

                                       0%          20%           40%         60%       80%      100%
                                                                                        ( ) No. of respondents
                               SEPs         FEPs       SOEPs       Fund managers




                                                                 -5-                                Research & Planning, HKEx
                                                                                                                  12 May 2005
Secondary Market Survey 2004

 Figure 3. Overseas trading experience in the past 12 months by respondent type

                                                               30% (82)
                                                 17% (15)
              Equities
                                                                                                 59% (19)
                                                                                                                            85% (11)


                                       10% (28)
                                                                          39% (35)
          Derivatives
                                                                                  47% (15)
                                                       23% (3)


                                                                                                            69% (187)
                                                                                             56% (50)
              Not any
                                                                    34% (11)
                                             15% (2)


                         0%          10%         20%         30%       40%        50%          60%       70%        80%        90%       100%


                SEPs          FEPs         SOEPs            Fund managers                                           ( ) No. of respondents




                Figure 4. Type of services offered to their clients by EP type

                                                                            39% (105)

         Investment advice                                                      42% (38)

                                                                                 44% (14)


                                                                                            53% (142)
        Margin financing*
          (SEPs only)




                                                            23% (63)
    Online trading for retail
                                                                   30% (27)
           investors
                                        6% (2)


                                0%         10%       20%       30%        40%        50%       60%      70%        80%      90%        100%

                                                               SEPs                  FEPs               SOEPs

         * Not applicable to FEPs and SOEPs.                                                                    ( ) No. of respondents




                                                                       -6-                                         Research & Planning, HKEx
                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

For all quantitative analyses in sections 4 - 11, respondents giving a score of 4 are considered
to take a neutral position; respondents giving a score of 1-3 (5-7) are considered to take the
                                                                          t
lower (higher) end positions; respondents giving 0, representing don’ know, are excluded
from calculating the mean score. For each question, an overall score for all respondent
types is presented in the corresponding tables. However, the responses to sub-questions
targeting different market segments should be viewed individually.

Note that since the size of the responded sample of fund managers is very small (13), caution
is needed in interpreting the results on their views.

4.      GENERAL MARKET CONDITIONS

4.1     Confidence in the market

Q1.1(1) Your confidence in the Hong Kong stock market as a whole is … …
                                                                                        (0%)          (0%)           (0%)      (6%)            (17%)         (44%)         (27%)      (6%)
                                                                               100%
                                   Mean
                                                                                90%
                                   score
                                                    % of respondents by type




                                                                                80%
                                           ^
SEPs                    (270)      5.05                                         70%
                                                                                60%                                                                                             54%
 Large SEPs              (25)      5.28                                                                                                                      46%
                                                                                50%
 Small SEPs             (245)      5.02                                         40%
                                           ^                                                                                                                                                 31%
Fund Managers            (13)      6.08                                         30%                                                                                       25%
                                                                                                                                              18%
                                                                                20%
Overall                 (283)      5.10                                         10%                                            6%                    8%            8%
                                                                                                                                                                                       5%
                                                                                       0% 0%         0% 0%          0% 0%               0%
^ Significantly different at 0.1% level.                                         0%
( ) No. of respondents giving a rating                                                   0                 1            2           3            4             5              6             7
                                                                                       Don't          Very                                                                              Very
    (i.e. excluding “Don’t know”)                                                                                                                                                       high
                                                                                       know           low


                                                                                                    SEPs                         Fund managers                           ( ): % of all respondents


Q1.1(2) FEP:      Your confidence in the HK derivatives market (excluding stock options)
                  as a whole is … ..
            SOEP: Your confidence in the HK stock options market as a whole is … ..
            FM:   Your confidence in the HK derivatives market as a whole is … ..
                                                                                         (1%)          (1%)           (1%)      (6%)            (16%)         (40%)        (27%)        (7%)
                                   Mean                                        100%

                                   score                                       90%
                                               % of respondents by type




                                                                               80%
FEPs                        90     5.10                                        70%
 Large FEPs               (20)     5.45                                        60%
 Small FEPs               (70)     5.00                                        50%                                                                           43%
                                                                                                                                                                   38%
                                                                               40%
SOEPs                     (32)     4.88                                                                                                                                25% 26%
                                                                                                                                                                              28% 33%
                                                                               30%
Fund Managers             (10)     5.60                                        20%
                                                                                              17%                                             17%
                                                                                                                                                    22%
                                                                                                                                                                                                    17%
                                                                                                         3%                              8%                                             8%
                                                                               10%                                             6% 6%
Overall                 (132)      5.08                                               0% 0%         0%         0%   1% 0% 0%                            0%                                   3%
                                                                                0%
( ) No. of respondents giving a rating                                                   0                 1            2           3               4              5              6             7
    (i.e. excluding “Don’t know”)                                                      Don't          Very                                                                                  Very
                                                                                       know           low                                                                                   high


                                                                                        FEPs                    SOEPs                   Fund managers                     ( ): % of all respondents




                                                                                              -7-                                              Research & Planning, HKEx
                                                                                                                                                             12 May 2005
        Secondary Market Survey 2004

         ou
Q1.2(1) Y … .. that the Hong Kong stock market is a fair and orderly market.
                                                                                             (0%)            (0%)            (4%)        (8%)          (21%)          (38%)           (24%)         (5%)
                                 Mean                                          100%
                                                                                90%
                                 score




                                                % of respondents by type
                                                                                80%
SEPs                   (270)      4.82                                          70%

 Large SEPs             (25)      5.08                                          60%
                                                                                50%                                                                                                        46%
 Small SEPs            (245)      4.80                                                                                                                               38% 38%
                                                                                40%
Fund Managers           (13)      5.46                                          30%
                                                                                                                                                      22%                            23%
                                                                                20%
Overall                (283)      4.85                                                                                   4%             8% 8%                                                      5% 8%
                                                                                10%
                                                                                       0% 0%             0% 0%                    0%                            0%
( ) No. of respondents giving a rating                                           0%
    (i.e. excluding “Don’t know”)                                                         0                   1               2           3              4                 5             6             7
                                                                                        Don't            Strongly                                                                                  Strongly
                                                                                        know             disagree                                                                                   agree


                                                                                                   SEPs                                 Fund managers                               ( ): % of all respondents



Q1.2(2) FEP:      Y … .. that the HK derivatives market (excluding stock options) is a fair
                   ou
                  and orderly market.
                   ou
            SOEP: Y … .. that the HK stock options market is a fair and orderly market.
            FM:    ou
                  Y … .. that the HK derivatives market is a fair and orderly market.
                                                                                         (2%)                (2%)        (2%)           (7%)           (20%)          (32%)            (29%)         (8%)
                                 Mean                                          100%

                                 score                                         90%
                                             % of respondents by type




                                                                               80%
FEPs                     (90)     5.02                                         70%

 Large FEPs              (20)     5.30                                         60%

 Small FEPs              (70)     4.94                                         50%
                                                                                                                                                                     37%
                                                                               40%                                                                                                  31%
SOEPs                    (32)     4.84                                                                                                                 25%                 25%   28%    27%
                                                                               30%
Fund Managers             (9)     4.89                                         20%
                                                                                             18%                                                    18%    18%               18%
                                                                                                                   9%        3%        8% 6%                                                       8% 6% 9%
                                                                               10%                           3%
Overall                (131)      4.97                                                0% 0%             1%              1%        0%           0%
                                                                                0%
( ) No. of respondents giving a rating                                                   0                   1               2            3               4                5               6             7
                                                                                      Don't             Strongly                                                                                    Strongly
    (i.e. excluding “Don’t know”)                                                     know              disagree                                                                                     agree


                                                                                                 FEPs                    SOEPs                      Fund managers                   ( ): % of all respondents



4.2     Attractiveness of the Main Board

Q1.3(1) For investors, investing in the Hong Kong Main Board is … ..
                                                                                              (0%)             (0%)           (0%)        (1%)          (12%)          (38%)            (39%)         (9%)
                                 Mean                                          100%
                                 score                                          90%
                                                    % of respondents by type




                                                                                80%                                                                                                          77%
                                         ^
SEPs                   (269)      5.40                                          70%
 Large SEPs             (25)      5.36                                          60%
 Small SEPs            (244)      5.40                                          50%
                                         ^                                                                                                                            40%            38%
Fund Managers           (13)      6.00                                          40%                                                     34%
                                                                                30%
Overall                (282)      5.43                                          20%                                                                   13%
                                                                                                                                                                                                             15%
                                                                                                                                                                8%                                  9%
                                                                                10%
^ Significantly different at 5% level.                                                 0% 0%              0% 0%          0% 0%                 0%                              0%
                                                                                 0%
( ) No. of respondents giving a rating                                                       0                 1              2           3                 4              5               6             7
    (i.e. excluding “Don’t know”)                                                        Don't             Very                                                                                       Very
                                                                                         know           unattractive                                                                               attractive


                                                                                                        SEPs                              Fund managers                             ( ): % of all respondents




                                                                                              -8-                                                     Research & Planning, HKEx
                                                                                                                                                                    12 May 2005
        Secondary Market Survey 2004

Q1.4(1) For issuers, listing on the Hong Kong Main Board is … ..
                                                                                                 (0%)
                                                                                         (6%) (0%)
                                                                                      (6%)                          (0%)
                                                                                                                  (0%)          (2%)
                                                                                                                              (2%)         (11%)
                                                                                                                                         (11%)          (36%)
                                                                                                                                                      (36%)            (35%)
                                                                                                                                                                      (35%)          (10%)
                                                                                                                                                                                    (10%)
                                 Mean                                     100%
                                                                        100%
                                 score                                    90%
                                                                        90%




                                             % of respondents by type
                                             % of respondents by type
                                         ^                                80%
                                                                        80%
SEPs                   (251)      5.39                                    70%
                                                                        70%
 Large SEPs             (25)      5.32                                    60%
                                                                        60%
 Small SEPs            (226)      5.39                                    50%
                                                                        50%
                                         ^                                                                                                           37%
                                                                                                                                                       37%             35% 38%
                                                                                                                                                                     35% 38%
Fund Managers           (10)      6.20                                    40%
                                                                        40%
                                                                                                                                                                                            31%
                                                                                                                                                                                          31%
                                                                          30%
                                                                        30%             23%
                                                                                      23%
Overall                (261)      5.42                                    20%
                                                                        20%
                                                                                                                                          11% 8%
                                                                                                                                        11% 8%                                        9%
                                                                                                                                                                                     9%
                                                                               5%
                                                                          10% 5%
                                                                        10%
^ Significantly different at 1% level.                                                            0% 0%          2% 0%
                                                                                                          0% 0% 2% 0%
                                                                                                   0% 0% 0% 0%                                                 0%
                                                                                                                                                              0%
                                                                          0%
                                                                         0%
( ) No. of respondents giving a rating                                                00               11          22          33          44             55              66              77
    (i.e. excluding “Don’t know”)                                                Don't
                                                                                   Don't           Very
                                                                                                      Very                                                                               Very
                                                                                                                                                                                       Very
                                                                                 know
                                                                                   know         unattractive
                                                                                                  unattractive                                                                        attractive
                                                                                                                                                                                    attractive


                                                                                                SEPs
                                                                                                  SEPs                         Fund managers
                                                                                                                                 Fund managers                         ( % of all respondents
                                                                                                                                                                    ( ): ): % of all respondents



4.3     Attractiveness of GEM

Q1.3(2) For investors, investing in the Hong Kong GEM is … ..
                                                                                          (1%)          (9%)       (28%)        (26%)      (23%)       (9%)            (2%)          (1%)
                                 Mean                                   100%
                                                                         90%
                                 score
                                             % of respondents by type




                                                                         80%
                                         ^
SEPs                   (263)      3.02                                   70%
                                         *
 Large SEPs             (25)      3.56                                   60%
                                         *                               50%
 Small SEPs            (238)      2.97
                                         ^                               40%
Fund Managers           (11)      3.82                                   30%
                                                                                                                 28%
                                                                                                                       33%
                                                                                                                             27%
                                                                                                                                        24% 17%
                                                                                                                                                              17%
                                                                         20%
Overall                (274)      3.05                                                    8%      10%                              8%                9%                        8%             8%
                                                                         10%
                                                                                 1%                        0%                                                        2%              1%
^ Significantly different at 5% level.                                    0%
* Significantly different at 5% level.                                                0                1           2           3           4              5                6              7
( ) No. of respondents giving a rating                                           Don't            Very                                                                                 Very
                                                                                 know          unattractive                                                                         attractive
    (i.e. excluding “Don’t know”)
                                                                                                SEPs                           Fund managers                        ( ): % of all respondents




Q1.4(2) For issuers, listing on the Hong Kong GEM is … ..
                                                                                  (8%)               (4%)         (13%)       (15%)       (31%)           (17%)            (9%)        (3%)
                                 Mean                                   100%
                                                                         90%
                                 score
                                             % of respondents by type




                                                                         80%
SEPs                   (244)      3.89                                   70%
 Large SEPs             (24)      4.17                                   60%
                                                                         50%
 Small SEPs            (220)      3.85
                                                                         40%
Fund Managers            (9)      4.44                                   30%              25%
                                                                                                                                        31%

                                                                                                                             15% 17%           17%   18%                   17%
                                                                         20%
Overall                (253)      3.91                                           7%               5%
                                                                                                                 13% 8%                                       8%      9%                      8%
                                                                         10%                                                                                                         3%
                                                                                                           0%
( ) No. of respondents giving a rating                                    0%
    (i.e. excluding “Don’t know”)                                                     0                1           2           3           4              5                6              7
                                                                                 Don't              Very                                                                               Very
                                                                                 know            unattractive                                                                       attractive


                                                                                                SEPs                           Fund managers                        ( ): % of all respondents




                                                                                          -9-                                           Research & Planning, HKEx
                                                                                                                                                      12 May 2005
        Secondary Market Survey 2004

4.4     Attractiveness of the derivatives market

Q1.3(3) FEP:      For investors, trading in the Hong Kong derivatives market (excluding stock
                  options) is … ..
            SOEP: For investors, trading in the Hong Kong stock options market is … ..
            FM:   For investors, trading in the Hong Kong derivatives market is … ..
                                                                                           (2%)           (1%)           (4%)           (8%)              (32%)         (36%)         (14%)         (3%)
                                   Mean                                       100%
                                   score                                       90%




                                                   % of respondents by type
                                                                               80%
FEPs                      (89)     4.66                                        70%
 Large FEPs               (20)     4.75                                        60%
 Small FEPs               (69)     4.64                                        50%
                                                                                                                                                                        43%
                                                                                                                                                         34%
SOEPs                     (32)     4.25                                        40%
                                                                                                                                                      33%                 28%
                                                                                              25%                                                                 25%                     25%
Fund Managers              (9)     4.89                                        30%
                                                                                                                                                                                        13%
                                                                               20%
                                                                                                                         9% 8%     8% 9%                                          8% 13%                    3% 8%
Overall                 (130)      4.58                                        10%
                                                                                     0% 0%                3%
                                                                                                               0%
                                                                                                                    1%                          0%                                                  2%
                                                                                                     0%
                                                                                0%
( ) No. of respondents giving a rating                                                    0               1               2                 3                 4               5             6               7
    (i.e. excluding “Don’t know”)                                                     Don't            Very                                                                                            Very
                                                                                      know          unattractive                                                                                    attractive


                                                                                               FEPs                  SOEPs                           Fund managers                  ( ): % of all respondents




5.      TRADING, CLEARING AND SETTLEMENT

5.1     Efficiency and reliability of trading and clearing systems

Q2.1 SEP:     In respect of efficiency, the Exchange's stock market trading system
              (AMS/3) is … …
        FEP:  In respect of efficiency, the Exchange's derivatives market trading system
              (HKATS) is … …
        SOEP: In respect of efficiency, the Exchange's derivatives market trading system
              (HKATS) is … …
                                                                                       (0%)            (1%)         (1%)           (1%)               (7%)          (31%)           (43%)          (16%)
                                                                              100%
                                   Mean
                                                                              90%
                                   score
                                               % of respondents by type




                                                                              80%
                                           ^
SEPs                    (269)      5.74                                       70%

 Large SEPs              (25)      5.48                                       60%
                                                                                                                                                                              47% 46%
                                                                              50%
 Small SEPs             (244)      5.76                                                                                                                                 33%             40%
                                           ^                                  40%
FEPs                     (90)      5.41                                       30%
                                                                                                                                                                    28%                     28%

 Large FEPs              (20)      5.60                                       20%
                                                                                                                                                              19%                                 19%
                                                                                                                                                                                                        12%
                                                                                                                         3%                               9%
 Small FEPs              (70)      5.36                                       10%
                                                                                     0%             0%
                                                                                                               3%
                                                                                                                    1%        0%   0%
                                                                                                                                        2%
                                                                                                                                                0%
                                                                                                                                                     6%
                                                                                                                                                                                                             3%
                                           ^                                              0% 0%           0%
SOEPs                    (32)      5.03                                        0%
                                                                                          0               1              2              3                 4               5             6               7
Overall                 (391)      5.60                                               Don't            Very
                                                                                                    inefficient
                                                                                                                                                                                                     Very
                                                                                                                                                                                                   efficient
                                                                                      know
^ Significantly different at 0.1% level.
( ) No. of respondents giving a rating                                                         SEPs                       FEPs                            SOEPs                     ( ): % of all respondents
    (i.e. excluding “Don’t know”)




                                                                                              - 10 -                                                   Research & Planning, HKEx
                                                                                                                                                                     12 May 2005
        Secondary Market Survey 2004

Q2.2 SEP:     In respect of reliability, the Exchange's stock market trading system
              (AMS/3) is … …
        FEP:  In respect of reliability, the Exchange's derivatives market trading system
              (HKATS) is … …
        SOEP: In respect of reliability, the Exchange's derivatives market trading system
              (HKATS) is … …
                                                                                         (0%)            (0%)        (1%)         (1%)      (7%)         (28%)           (47%)           (15%)
                                   Mean                                         100%

                                   score                                         90%




                                                     % of respondents by type
                                                                                 80%
                                           ^
SEPs                    (269)      5.79                                          70%
 Large SEPs              (25)      5.56                                          60%
                                                                                                                                                                        50%
                                                                                                                                                                  44%
 Small SEPs             (244)      5.82                                          50%                                                                                          44%
                                           ^                                     40%                                                                      33%                     34%
FEPs                     (90)      5.43                                                                                                                 25%
                                                                                 30%
 Large FEPs              (20)      5.80                                          20%                                                              13%                                   19%

 Small FEPs              (70)      5.33                                          10%                                     2%           3%   6%
                                                                                                                                                10%                                        9% 6%
                                           ^                                           0% 0% 0% 0% 0% 0%            0%        0% 1% 1%
SOEPs                    (32)      5.28                                           0%
                                                                                          0                1             2          3           4             5               6               7
Overall                 (391)      5.67                                                 Don't            Very                                                                              Very
                                                                                        know           unreliable                                                                        reliable
^ Significantly different at 0.1% level.
( ) No. of respondents giving a rating                                                          SEPs                      FEPs                  SOEPs                   ( ): % of all respondents
    (i.e. excluding “Don’t know”)



Q2.3 SEP:     In respect of efficiency, the Exchange's stock market clearing and settlement
              system (CCASS) is … ..
        FEP:  In respect of efficiency, the Exchange's derivatives market clearing and
              settlement system (DCASS) is … ..
        SOEP: In respect of efficiency, the Exchange's derivatives market clearing and
              settlement system (DCASS) is … ..
                                                                                        (0%)           (0%)         (1%)         (1%)      (11%)         (28%)           (43%)           (16%)
                                   Mean                                         100%
                                   score                                        90%
                                               % of respondents by type




                                           ^                                    80%
SEPs                    (269)      5.81                                         70%
                                           *
 Large SEPs              (25)      5.48                                         60%
                                                                                                                                                                        48%
                                           *
 Small SEPs             (244)      5.84                                         50%                                                                      41%
                                           ^                                    40%                                                                   32%                 34%
FEPs                     (90)      5.11                                                                                                                                      28%
                                                                                30%                                                         21%22% 25%                                  20%
 Large FEPs              (20)      5.25                                         20%
                                                                                                                                                                                           7%
 Small FEPs              (70)      5.07                                         10% 0% 0% 0% 0%1% 0% 0% 2% 3% 1% 2% 3%
                                                                                                                                           6%
                                                                                                                                                                                                  3%
                                           ^
SOEPs                    (32)      4.97                                          0%
                                                                                        0       1        2        3                             4             5               6               7
Overall                 (391)      5.58                                                Don't        Very                                                                                   Very
                                                                                       know      inefficient                                                                             efficient
^ Significantly different at 0.1% level.
* Significantly different at 5% level.                                                         SEPs                      FEPs                   SOEPs                   ( ): % of all respondents
( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)




                                                                                           - 11 -                                           Research & Planning, HKEx
                                                                                                                                                          12 May 2005
        Secondary Market Survey 2004

Q2.4 SEP:     In respect of reliability, the Exchange's stock market clearing and settlement
              system (CCASS) is … ..
        FEP:  In respect of reliability, the Exchange's derivatives market clearing and
              settlement system (DCASS) is … ..
        SOEP: In respect of reliability, the Exchange's derivatives market clearing and
              settlement system (DCASS) is … ..
                                                                                                 (1%)           (0%)         (0%)        (1%)       (7%)      (26%)               (46%)         (19%)
                                   Mean                                                 100%
                                   score                                                90%




                                                             % of respondents by type
                                           ^                                            80%
SEPs                    (268)      5.93                                                 70%
 Large SEPs              (25)      5.80                                                 60%
                                                                                                                                                                             50%
 Small SEPs             (243)      5.94                                                 50%
                                                                                                                                                                  41%              38%
                                           ^                                                                                                                   34%
FEPs                     (89)      5.30                                                 40%                                                                                          31%
                                                                                        30%
 Large FEPs              (20)      5.40                                                 20%
                                                                                                                                                             22%                              24%
                                                                                                                                                                                                   16%
                                                                                                                                                   13% 9%                                        9%
 Small FEPs              (69)      5.28                                                 10%             3%                                       4%
                                           ^                                                   0% 1%         0% 1% 0% 0% 1% 0% 0% 2% 0%
SOEPs                    (31)      5.55                                                  0%
                                                                                                    0               1         2           3          4             5                6             7
Overall                 (388)      5.75                                                          Don't         Very                                                                            Very
                                                                                                 know        unreliable                                                                       reliable
^ Significantly different at 0.1% level.
( ) No. of respondents giving a rating                                                                   SEPs                     FEPs              SOEPs                    ( ): % of all respondents
    (i.e. excluding “Don’t know”)



5.2     Market liquidity

Q2.5(1) Overall market liquidity of the Main Board is … ..
                                                                                                    (0%)         (0%)         (0%)       (2%)       (10%)      (43%)               (37%)          (7%)
                                   Mean                                             100%
                                   Score                                                90%
                                               % of respondents by type




                                           ^                                            80%
SEPs                    (269)      5.33                                                 70%
                                                                                                                                                                                        62%
 Large SEPs              (25)      5.24                                                 60%
 Small SEPs             (244)      5.34                                                 50%
                                                                                                                                                              44%
                                           ^                                                                                                                                      36%
Fund Managers            (13)      5.85                                                 40%
                                                                                        30%
                                                                                                                                                                           15%                            15%
Overall                 (282)      5.35                                                 20%
                                                                                                                                                   10% 8%
                                                                                        10%                                                                                                      6%
^ Significantly different at 5% level.                                                         0%       0%              0%   0% 0%       2% 0%
                                                                                         0%                   0%
( ) No. of respondents giving a rating                                                              0               1          2           3             4             5                6             7
    (i.e. excluding “Don’t know”)                                                               Don't           Very                                                                              Very
                                                                                                know            poor                                                                              good


                                                                                                             SEPs                         Fund managers                          ( ): % of all respondents




                                                                                                    - 12 -                                         Research & Planning, HKEx
                                                                                                                                                                 12 May 2005
         Secondary Market Survey 2004

Q2.5(2) Overall market liquidity of GEM is … ..
                                                                                      (1%)            (12%)            (28%)      (25%)             (20%)          (8%)         (4%)           (0%)
                                                                          100%
                                   Mean                                    90%
                                   score




                                               % of respondents by type
                                                                           80%

SEPs                    (262)      2.98                                    70%
                                                                           60%
 Large SEPs              (24)      3.21                                    50%
 Small SEPs             (238)      2.95                                    40%
                                                                                                                  29%
Fund Managers            (10)      2.90                                    30%
                                                                                                            27%                  26%
                                                                                                                                                  20% 18%
                                                                                                                           18%
                                                                           20%
Overall                 (272)      2.97                                    10%
                                                                                          9%      12%                                      9%                    8% 9%          4% 9%
                                                                                 1%                                                                                                             0%        0%
( ) No. of respondents giving a rating                                     0%
                                                                                      0                 1                  2           3                4             5             6                7
   (i.e. excluding “Don’t know”)
                                                                                   Don't              Very                                                                                         Very
                                                                                   know               poor                                                                                         good


                                                                                                 SEPs                                  Fund managers                          ( ): % of all respondents



Q2.5(3) FEP:  Overall derivatives market (excluding stock options) liquidity is … ..
        SOEP: Overall stock options market liquidity is … ..
        FM:   Overall market liquidity on the Hong Kong derivatives market is … ..
                                                                                      (2%)            (2%)         (3%)           (14%)             (27%)        (37%)          (14%)           (2%)
                                   Mean                                   100%
                                                                          90%
                                   score
                                               % of respondents by type




                                                                          80%
                                           ^
FEPs                      (90)     4.73                                   70%

 Large FEPs               (20)     4.55                                   60%
                                                                          50%
 Small FEPs               (70)     4.79                                                                                                                         43%
                                           ^                              40%
SOEPs                     (32)     3.75                                   30%
                                                                                          27%                                      28%
                                                                                                                                                 26%
                                                                                                                                                    31%27%            25%
                                           ^
Fund Managers              (8)     4.50                                   20%
                                                                                                                                                                          18% 17%        18%
                                                                                                                       9% 9% 10%                                                    3%
                                                                                                      3%
                                                                          10%
Overall                 (130)      4.48                                          0% 0%           1%         0%    0%                       0%                                                  3%
                                                                                                                                                                                                     0%
                                                                                                                                                                                                       0%
                                                                           0%
                                                                                      0                 1              2               3                4             5             6                7
^ Significantly different at 0.1% level.
                                                                                  Don't            Very                                                                                             Very
( ) No. of respondents giving a rating                                            know             poor                                                                                             good
    (i.e. excluding “Don’t know”)
                                                                                          FEPs                    SOEPs                         Fund managers                 ( ): % of all respondents




5.3     Market depth and price efficiency3 in the stock market

Q2.6(1) Overall stock market depth on the Main Board is … ..
                                                                                    (1%)            (0%)           (0%)           (3%)             (24%)        (49%)         (20%)            (4%)
                                   Mean                                   100%

                                   score                                  90%
                                               % of respondents by type




                                                                          80%
SEPs                    (267)      4.96                                   70%
 Large SEPs              (25)      4.76                                   60%
                                                                                                                                                             49%
 Small SEPs             (242)      4.98                                   50%
                                                                                                                                                                     38%          38%
                                                                          40%
Fund Managers            (13)      5.38
                                                                          30%                                                                    24%
                                                                                                                                                                            19%
                                                                                                                                                       15%
Overall                 (280)      4.98                                   20%
                                                                                                                                                                                                   8%
                                                                          10%                                                                                                              3%
                                                                                 1% 0%            0% 0%           0% 0%          3% 0%
( ) No. of respondents giving a rating                                     0%
    (i.e. excluding “Don’t know”)                                                     0               1                2           3                4            5              6              7
                                                                                  Don't            Very                                                                                    Very
                                                                                  know             poor                                                                                    good


                                                                                                 SEPs                             Fund managers                            ( ): % of all respondents


3
    The ability of stock prices to reflect market and company information.


                                                                                          - 13 -                                                   Research & Planning, HKEx
                                                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

Q2.6(2) Overall stock market depth on GEM is … ..
                                                                                              (3%)          (20%)       (23%)       (25%)          (20%)        (5%)        (3%)          (0%)
                                 Mean                                             100%

                                 score                                            90%




                                             % of respondents by type
                                                                                  80%
SEPs                   (259)      2.76                                            70%
 Large SEPs             (24)      2.88                                            60%

 Small SEPs            (235)      2.75                                            50%
                                                                                  40%                            36%
Fund Managers           (10)      2.70                                                                                 24%         25%
                                                                                  30%
                                                                                                       19%                               18%      21%
Overall                (269)      2.76                                            20%
                                                                                                  9%                         9%                         9%    5% 9%                  9%
                                                                                  10%
                                                                                         3%                                                                                2%             0% 0%
( ) No. of respondents giving a rating                                             0%
    (i.e. excluding “Don’t know”)                                                             0              1           2           3              4           5               6           7
                                                                                         Don't             Very                                                                           Very
                                                                                         know              poor                                                                           good


                                                                                                       SEPs                          Fund managers                        ( ): % of all respondents




Q2.7(1) Stock prices reflect market and company information on the Main Board … ..
                                                                                           (1%)             (0%)        (1%)        (3%)           (27%)      (45%)         (22%)          (2%)
                                                                                  100%
                                 Mean
                                                                                   90%
                                 Score
                                                       % of respondents by type




                                                                                   80%
                                         ^
SEPs                   (268)      4.88                                             70%
                                                                                                                                                                                 62%
                                                                                   60%
 Large SEPs             (25)      4.92                                                                                                                        46%
                                                                                   50%
 Small SEPs            (243)      4.88                                             40%
                                         ^                                                                                                                          31%
Fund Managers           (13)      5.54                                             30%
                                                                                                                                                  27%
                                                                                                                                                                           20%
                                                                                   20%
Overall                (281)      4.91                                             10%
                                                                                                                                                         8%
                                                                                         1% 0%             0% 0%       1% 0%       3% 0%                                                  3% 0%
^ Significantly different at 1% level.                                              0%
( ) No. of respondents giving a rating                                                        0               1           2              3           4          5               6           7
                                                                                          Don't             Very                                                                          Very
    (i.e. excluding “Don’t know”)
                                                                                          know             poorly                                                                         well


                                                                                                       SEPs                          Fund managers                        ( ): % of all respondents




Q2.7(2) Stock prices reflect market and company information on GEM … ..
                                                                                          (3%)             (7%)         (24%)       (22%)          (26%)      (14%)         (2%)          (2%)
                                                                                  100%
                                 Mean
                                                                                  90%
                                 score
                                             % of respondents by type




                                                                                  80%
SEPs                   (261)      3.30                                            70%
                                                                                  60%
 Large SEPs             (24)      3.17
                                                                                  50%
 Small SEPs            (237)      3.32                                            40%
Fund Managers           (10)      3.40                                            30%
                                                                                                                             27%
                                                                                                                                   23%
                                                                                                                                                  26% 27%
                                                                                                                       24%                                                          18%
                                                                                  20%                                                                         15%
Overall                (271)      3.31                                            10%
                                                                                                  9%    7% 9%                                9%
                                                                                         2%                                                                         0%      1%            2% 0%
( ) No. of respondents giving a rating                                             0%
    (i.e. excluding “Don’t know”)                                                             0              1           2           3              4           5                6          7
                                                                                         Don't              Very                                                                           Very
                                                                                         know              poorly                                                                          well


                                                                                                       SEPs                          Fund managers                        ( ): % of all respondents




                                                                                                  - 14 -                                           Research & Planning, HKEx
                                                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

5.4     Trading aspects in the stock options market

Q2.8 The performance of stock options market makers in responding to quote requests is … ..
                                                                               (3%)       (3%)          (6%)          (13%)    (25%)     (31%)       (9%)       (9%)
                                                                       100%
                                 Mean
                                                                       90%
                                 score




                                         % of respondents by type
                                                                       80%
SOEPs                    (31)     4.45                                 70%
                                                                       60%
Overall                  (31)     4.45                                 50%
                                                                       40%
( ) No. of respondents giving a rating                                                                                                   31%
                                                                                                                               25%
    (i.e. excluding “Don’t know”)                                      30%
                                                                       20%
                                                                                                                       13%                            9%          9%
                                                                       10%                              6%
                                                                               3%          3%
                                                                        0%
                                                                                0           1            2              3       4         5           6           7
                                                                              Don't       Very                                                                  Very
                                                                              know        poor                                                                  good

                                                                                                              SOEPs                               ( ): % of all respondents




Q2.9 The exercise and assignment mechanism in stock options market is … ..
                                                                               (0%)       (0%)          (0%)          (13%)    (28%)    (34%)       (25%)        (0%)
                                                                       100%
                                 Mean
                                                                        90%
                                         % of respondents by type




                                 score
                                                                        80%
SOEPs                    (32)     4.72                                  70%
                                                                        60%
Overall                  (32)     4.72                                  50%

( ) No. of respondents giving a rating                                  40%                                                              34%
                                                                                                                               28%                   25%
    (i.e. excluding “Don’t know”)                                       30%
                                                                        20%
                                                                                                                       13%
                                                                        10%
                                                                                0%          0%           0%                                                       0%
                                                                         0%
                                                                                 0           1            2             3       4         5            6           7
                                                                              Don't        Very                                                                    Very
                                                                              know     unsatisfactory                                                          satisfactory

                                                                                                              SOEPs                               ( ): % of all respondents




Q2.10       The capital adjustment methodology in stock options market is … ..
                                                                               (3%)       (0%)          (0%)          (3%)    (34%)     (38%)      (16%)       (6%)
                                                                       100%
                                 Mean
                                                                        90%
                                 score
                                            % of respondents by type




                                                                        80%
SOEPs                    (31)     4.87                                  70%
                                                                        60%
Overall                  (31)     4.87                                  50%
                                                                                                                                          38%
( ) No. of respondents giving a rating                                  40%                                                     34%
    (i.e. excluding “Don’t know”)                                       30%
                                                                                                                                                      16%
                                                                        20%
                                                                        10%                                                                                        6%
                                                                               3%           0%           0%             3%
                                                                         0%
                                                                                 0           1            2              3          4         5           6            7
                                                                               Don't      Very                                                                    Very
                                                                               know       unfair                                                                  fair

                                                                                                              SOEPs                                ( ): % of all respondents




                                                                                 - 15 -                                       Research & Planning, HKEx
                                                                                                                                            12 May 2005
        Secondary Market Survey 2004

5.5     Transaction costs

Q2.11(1) Transaction costs for trading, clearing and settlement in the HK stock market are … ..
                                                                                  100%
                                                                                                 (0%)             (2%)         (8%)          (15%)             (37%)         (23%)         (10%)            (6%)
                                 Mean
                                                                                        90%
                                 score




                                             % of respondents by type
                                                                                        80%

SEPs                   (269)      4.23                                                  70%
                                                                                        60%
 Large SEPs             (25)      4.12                                                                                                                            46%
                                                                                        50%
 Small SEPs            (244)      4.24                                                  40%                                                                 37%
Fund Managers           (13)      4.54                                                  30%
                                                                                                                                                                            23%
                                                                                        20%                                                 15% 15%                               15%          15%
Overall                (282)      4.24                                                  10%
                                                                                                                              8%                                                         9%
                                                                                                                                                                                                           6% 8%
                                                                                               0% 0%             2% 0%                 0%
( ) No. of respondents giving a rating                                                  0%
    (i.e. excluding “Don’t know”)                                                                 0                1               2           3               4              5               6              7
                                                                                                Don't           Very                                                                                       Very
                                                                                                know        unreasonable                                                                                reasonable


                                                                                                             SEPs                              Fund managers                            ( ): % of all respondents


Q2.11(2) FEP:     Transaction cost for trading, clearing and settlement in the HK derivatives
                  market (excluding stock options) are … ..
            SOEP: Transaction cost for trading, clearing and settlement in the HK stock options
                  market are … ..
            FM:   Transaction cost for trading, clearing and settlement in the HK derivatives
                  market are … ..
                                                                                                  (3%)            (4%)         (2%)           (19%)            (35%)          (27%)           (11%)           (1%)
                                                                                    100%
                                 Mean
                                                                                        90%
                                 score
                                                % of respondents by type




                                                                                        80%

FEPs                     (90)     4.19                                                  70%
                                         #                                              60%
 Large FEPs              (20)     3.65
                                         #                                              50%
 Small FEPs              (70)     4.34                                                  40%
                                                                                                      36%                                                   38%
                                                                                                                                                               28%    27% 27%
SOEPs                    (32)     4.13                                                  30%                                                    25%                27%    28%

Fund Managers             (7)     4.29                                                  20%
                                                                                                                                            18%
                                                                                                                                                                                          12% 9%
                                                                                                                                                      9%
                                                                                                                  6%
                                                                                        10%                  3%               2% 0% 0%                                                                           3%
                                                                                               0% 0%                    0%
Overall                (129)      4.18                                                  0%
                                                                                                                                                                                                      0%   0%         0%

                                                                                                  0                1               2              3                4              5               6              7
# Significantly different at 5% level.                                                          Don't            Very                                                                                         Very
( ) No. of respondents giving a rating                                                          know         unreasonable                                                                                  reasonable
    (i.e. excluding “Don’t know”)
                                                                                                          FEPs                 SOEPs                       Fund managers                 ( ): % of all respondents


Q2.12(1) In comparison with overseas markets, transaction costs for trading, clearing and
         settlement in the Hong Kong stock market are … ..
                                                                                                       (12%)           (1%)        (7%)       (11%)            (31%)         (20%)        (12%)            (5%)
                                                                                        100%
                                 Mean
                                                                                        90%
                                 score
                                                             % of respondents by type




                                                                                        80%

SEPs                   (238)      4.30                                                  70%
                                                                                        60%
 Large SEPs             (25)      4.04                                                                                                                                46%
                                                                                        50%
 Small SEPs            (213)      4.33                                                  40%
                                                                                                                                                            30%
Fund Managers           (12)      4.67                                                  30%
                                                                                                                                                                            21%
                                                                                        20%                                                                                       15%             15%
                                                                                                                                            11%                                          12%
Overall                (250)      4.32                                                  10%
                                                                                                12% 8%                         8%                     8%                                                   4% 8%
                                                                                                                 1% 0%                 0%
( ) No. of respondents giving a rating                                                   0%
    (i.e. excluding “Don’t know”)                                                                     0             1              2           3                  4           5               6              7
                                                                                                 Don't           Very                                                                                      Very
                                                                                                 know        uncompetitive                                                                              competitive


                                                                                                                 SEPs                             Fund managers                         ( ): % of all respondents


                                                                                                   - 16 -                                                     Research & Planning, HKEx
                                                                                                                                                                            12 May 2005
        Secondary Market Survey 2004

Q2.12(2) FEP:     In comparison with overseas markets, transaction costs for trading, clearing
                  and settlement in the Hong Kong derivatives market (excluding stock options)
                  are … ..
            SOEP: In comparison with overseas markets, transaction costs for trading, clearing
                  and settlement in the Hong Kong stock options market are … ..
            FM:   In comparison with overseas markets, transaction costs for trading, clearing
                  and settlement in the Hong Kong derivatives market are … ..
                                                                                      (16%)          (2%)         (5%)            (21%)         (26%)     (26%)         (6%)         (0%)
                                 Mean                                    100%
                                 score                                   90%




                                             % of respondents by type
                                                                         80%
FEPs                     (78)     3.99                                   70%
                                         #
 Large FEPs              (20)     3.35                                   60%
                                         #                               50%              45%
 Small FEPs              (58)     4.21                                                                                                                28%
                                                                         40%
SOEPs                      28     4.07                                   30%                                                      25%      28% 27%
                                                                                                                                                   24% 27%
                                                                                13%                                         22%               19%
Fund Managers             (6)     4.50                                   20%
                                                                                  13%                                                                                 9%
                                                                                                  3%  6% 3%                                                         6%
                                                                         10%                                                                                                        0% 0%
                                                                                                1% 0%
Overall                 (112)     4.04                                    0%
                                                                                                            0%                        0%                                    0% 0%

#                                                                                     0             1              2              3             4         5             6            7
  Significantly different at 1% level.                                           Don't             Very                                                                             Very
( ) No. of respondents giving a rating                                           know          uncompetitive                                                                     competitive
    (i.e. excluding “Don’t know”)
                                                                                           FEPs                  SOEPs                    Fund managers            ( ): % of all respondents




5.6     Efficiency of transaction processes

Q2.13(1) The trading process in the Hong Kong stock market is … ..
                                                                                      (0%)           (0%)          (0%)           (0%)           (8%)     (15%)        (54%)          (23%)
                                                                         100%
                                 Mean
                                                                          90%
                                              % of respondents by type




                                 score                                    80%

Fund Managers            (13)     5.92                                    70%
                                                                          60%                                                                                               54%
Overall                  (13)     5.92                                    50%
                                                                          40%
( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)                                         30%                                                                                                            23%
                                                                          20%                                                                                 15%
                                                                                                                                                    8%
                                                                          10%
                                                                                          0%           0%              0%             0%
                                                                           0%
                                                                                          0             1               2             3             4          5             6            7
                                                                                      Don't           Very                                                                              Very
                                                                                      know         inefficient                                                                        efficient

                                                                                                                       Fund Managers                                   ( ): % of all respondents




                                                                                          - 17 -                                              Research & Planning, HKEx
                                                                                                                                                            12 May 2005
        Secondary Market Survey 2004

Q2.13(2) The trading process in the Hong Kong derivatives market is … ..
                                                                                             (27%)        (0%)        (9%)       (0%)         (0%)     (36%)       (18%)         (9%)
                                                                                     100%
                                 Mean
                                                                                     90%




                                                         % of respondents by type
                                 score
                                                                                     80%
Fund Managers              (8)    5.13                                               70%
                                                                                     60%
Overall                    (8)    5.13                                               50%
                                                                                     40%                                                                 36%
( ) No. of respondents giving a rating
                                                                                             27%
    (i.e. excluding “Don’t know”)                                                    30%
                                                                                                                                                                     18%
                                                                                     20%
                                                                                                                        9%                                                        9%
                                                                                     10%
                                                                                                            0%                        0%       0%
                                                                                      0%
                                                                                                 0             1           2             3         4         5           6         7
                                                                                             Don't        Very                                                                   Very
                                                                                             know      inefficient                                                             efficient

                                                                                                                       Fund Managers                              ( ): % of all respondents




Q2.14(1) The clearing and settlement process in the Hong Kong stock market is … ..
                                                                                             (0%)        (0%)         (0%)       (0%)         (8%)     (23%)        (46%)       (23%)
                                                                                    100%
                                 Mean
                                                                                    90%
                                         % of respondents by type




                                 score                                              80%

Fund Managers            (13)     5.85                                              70%
                                                                                    60%
Overall                  (13)     5.85                                              50%                                                                               46%

                                                                                    40%
( ) No. of respondents giving a rating
                                                                                    30%
    (i.e. excluding “Don’t know”)                                                                                                                        23%                      23%
                                                                                    20%
                                                                                                                                               8%
                                                                                    10%
                                                                                            0%            0%           0%            0%
                                                                                     0%
                                                                                             0             1            2             3         4            5           6            7
                                                                                            Don't       Very                                                                      Very
                                                                                            know     inefficient                                                                efficient

                                                                                                                      Fund Managers                               ( ): % of all respondents



Q2.14(2) The clearing and settlement process in the Hong Kong derivatives market is … ..
                                                                                             (27%)        (0%)        (9%)       (0%)         (0%)      (36%)       (9%)      (18%)
                                                                               100%
                                 Mean
                                                                                    90%
                                         % of respondents by type




                                 score
                                                                                    80%
Fund Managers              (8)    5.25                                              70%
                                                                                    60%
Overall                    (8)    5.25                                              50%
                                                                                    40%                                                                 36%
( ) No. of respondents giving a rating
                                                                                            27%
    (i.e. excluding “Don’t know”)                                                   30%
                                                                                                                                                                                18%
                                                                                    20%
                                                                                                                      9%                                             9%
                                                                                    10%
                                                                                                         0%                          0%       0%
                                                                                     0%
                                                                                             0             1           2             3         4         5           6            7
                                                                                            Don't       Very                                                                   Very
                                                                                            know     inefficient                                                             efficient

                                                                                                                     Fund Managers                               ( ): % of all respondents




                                                                                              - 18 -                                         Research & Planning, HKEx
                                                                                                                                                           12 May 2005
        Secondary Market Survey 2004

Q2.15       The share registration process in the Hong Kong stock market is … ..
                                                                                                   (1%)           (2%)          (5%)              (8%)             (26%)           (34%)            (18%)              (6%)
                                                                                  100%
                                 Mean
                                                                                   90%
                                 score




                                                       % of respondents by type
                                                                                   80%
                                         ^
SEPs                   (268)      4.60                                             70%
                                                                                   60%
 Large SEPs             (24)      4.58
                                                                                   50%
 Small SEPs            (244)      4.61                                             40%
                                                                                                                                                                                           42%           42%
                                         ^                                                                                                                                    34%
Fund Managers           (12)      5.50                                             30%                                                                        27%
                                                                                                                                                                                                  17%
                                                                                   20%
Overall                (280)      4.64                                             10%                                     6%
                                                                                                                                           9%                          8%                                           6% 8%
                                                                                           1% 0%            2% 0%                   0%                0%
^ Significantly different at 5% level.                                              0%
( ) No. of respondents giving a rating                                                             0              1             2                 3                4                   5                6                  7
                                                                                            Don't             Very                                                                                                  Very
    (i.e. excluding “Don’t know”)                                                                                                                                                                                 efficient
                                                                                            know           inefficient


                                                                                                           SEPs                                   Fund managers                                  ( ): % of all respondents




5.7             s
        Exchange’ overall risk management

Q2.16(1) The Exchange's overall risk management for the stock market is … ..
                                                                                            (2%)             (1%)          (1%)               (5%)            (22%)               (39%)            (25%)            (5%)
                                 Mean                                             100%

                                 score                                             90%
                                                  % of respondents by type




                                                                                   80%
                                         ^
SEPs                   (263)      4.92                                             70%
 Large SEPs             (25)      4.84                                             60%
                                                                                   50%                                                                                                                  46%
 Small SEPs            (238)      4.93                                                                                                                                       39%
                                         ^                                         40%
Fund Managers           (13)      5.62                                             30%
                                                                                                                                                            23%                        23%       24%
                                                                                                                                                                   15%                                                  15%
Overall                (276)      4.95                                             20%
                                                                                                                                          5%                                                                      4%
                                                                                   10%
                                                                                          2%               1% 0%          1% 0%                    0%
^ Significantly different at 5% level.                                                             0%
                                                                                    0%
( ) No. of respondents giving a rating                                                         0               1            2                  3               4                   5                6                  7
    (i.e. excluding “Don’t know”)                                                         Don't              Very                                                                                                 Very
                                                                                          know               poor                                                                                                 good


                                                                                                          SEPs                                 Fund managers                                 ( ): % of all respondents




Q2.16(2) FEP:     The Exchange's overall risk management for the derivatives market
                  (excluding stock options) is … ..
            SOEP: The Exchange's overall risk management for the stock options market is … ..
            FM:   The Exchange's overall risk management for the derivatives market is … ..
                                                                                          (3%)            (0%)           (3%)            (3%)              (23%)            (41%)                (23%)            (5%)
                                 Mean                                             100%
                                                                                  90%
                                 score
                                             % of respondents by type




                                                                                  80%
FEPs                     (89)     5.01                                            70%
                                                                                  60%
 Large FEPs              (20)     4.75                                                                                                                                        44%
                                                                                  50%
 Small FEPs              (69)     5.09                                                                                                                                      40%        36%
                                                                                  40%
SOEPs                    (32)     4.75                                            30%
                                                                                                   27%                                                        31%
                                                                                                                                                                                             26%
                                                                                                                                                        22%                                                 18%
Fund Managers             (8)     4.75                                            20%                                                                                                              16%
                                                                                                                                 9%                                    9%
                                                                                  10%                                                         3%                                                               6%
                                                                                                                                         3%                                                                         3% 0%
Overall                (129)      4.93                                             0%
                                                                                         1% 0%            0% 0% 0%       2% 3%                     0%

                                                                                               0              1             2                 3                4                  5                 6               7
( ) No. of respondents giving a rating
                                                                                          Don't             Very                                                                                                  Very
    (i.e. excluding “Don’t know”)                                                         know              poor                                                                                                  good


                                                                                                   FEPs                  SOEPs                          Fund managers                        ( ): % of all respondents



                                                                                               - 19 -                                                       Research & Planning, HKEx
                                                                                                                                                                          12 May 2005
        Secondary Market Survey 2004

6.      MARKET REGULATION

6.1     Regulation and corporate governance of listed companies

Q3.1(1) The overall regulation of listed companies on the Main board is … ..
                                                                                     (1%)         (1%)         (2%)           (8%)           (25%)       (43%)           (17%)           (2%)
                                                                         100%
                                 Mean                                    90%
                                 score




                                         % of respondents by type
                                                                         80%
                                                                         70%
SEPs                   (269)      4.67
                                                                         60%
 Large SEPs             (25)      4.56                                   50%                                                                           44%
 Small SEPs            (244)      4.68                                   40%
                                                                                                                                                                                38%
                                                                                                                                                                 31%
Fund Managers           (12)      5.17                                   30%                                                               26%
                                                                                                                                                 23%
                                                                         20%                                                                                            16%
Overall                (281)      4.69                                   10%
                                                                                         8%                                  9%
                                                                                0%             1%        0%   2%       0%             0%                                               2%         0%
                                                                          0%
( ) No. of respondents giving a rating
                                                                                     0               1             2              3              4           5                  6             7
    (i.e. excluding “Don’t know”)                                                                                                                                                        Very
                                                                                Don't             Very
                                                                                know           ineffective                                                                             effective


                                                                                               SEPs                               Fund managers                        ( ): % of all respondents



Q3.1(2) The overall regulation of listed companies on GEM is … ..
                                                                                (2%)            (6%)          (14%)         (21%)           (28%)       (21%)          (6%)           (1%)
                                 Mean                                    100%
                                                                         90%
                                 score
                                         % of respondents by type




                                                                         80%
SEPs                   (264)      3.68                                   70%
 Large SEPs             (23)      3.74                                   60%
                                                                         50%
 Small SEPs            (241)      3.67
                                                                         40%
Fund Managers            (8)      4.38                                   30%
                                                                                                                                           28% 30%           30%
                                                                                      20%                     14%           22%                        21%
Overall                (272)      3.70                                   20%
                                                                                                6%
                                                                                                                    10%                                                       10%
                                                                         10%                                                                                           6%
                                                                                1%                       0%                          0%                                               1% 0%
( ) No. of respondents giving a rating                                    0%
    (i.e. excluding “Don’t know”)                                                    0               1             2             3           4           5                  6             7
                                                                                 Don't           Very                                                                                   Very
                                                                                 know         ineffective                                                                             effective


                                                                                              SEPs                            Fund managers                        ( ): % of all respondents




Q3.2(1) The corporate governance of listed companies on the Main Board is … ..
                                                                                     (3%)            (1%)       (1%)         (10%)          (29%)       (39%)           (17%)           (1%)
                                                                         100%
                                 Mean                                     90%
                                 score
                                              % of respondents by type




                                                                          80%

SEPs                   (263)      4.64                                    70%
                                                                          60%
 Large SEPs             (24)      4.71                                    50%
 Small SEPs            (239)      4.64                                    40%
                                                                                                                                                       39%
                                                                                                                                           29%                               31%
Fund Managers           (12)      4.75                                    30%                                                                    23%         23%
                                                                          20%                                                     15%                                  16%
Overall                (275)      4.65                                    10%
                                                                                         8%                                 9%
                                                                                3%              1% 0%         1% 0%                                                                   1% 0%
                                                                           0%
( ) No. of respondents giving a rating
                                                                                     0               1             2             3           4           5                6               7
    (i.e. excluding “Don’t know”)
                                                                                 Don't            Very                                                                                 Very
                                                                                 know             poor                                                                                 good


                                                                                              SEPs                            Fund managers                        ( ): % of all respondents




                                                                                         - 20 -                                             Research & Planning, HKEx
                                                                                                                                                          12 May 2005
        Secondary Market Survey 2004

Q3.2(2) The corporate governance of listed companies on GEM is … ..
                                                                                      (4%)          (9%)             (17%)              (23%)                    (27%)         (15%)            (4%)                (0%)
                                 Mean                                   100%
                                                                         90%
                                 score




                                           % of respondents by type
                                                                         80%
SEPs                   (257)      3.37                                   70%

 Large SEPs             (22)      3.73                                   60%
                                                                         50%
 Small SEPs            (235)      3.34
                                                                         40%
Fund Managers            (7)      3.14                                   30%
                                                                                         30%
                                                                                                                                                            27%
                                                                                                                                                                    30%
                                                                                                                                        23% 20%
                                                                                                                      17% 20%                                                 16%
                                                                         20%
Overall                (264)      3.36                                                             9%                                                                                          5%
                                                                         10%        3%                        0%                                                                      0%                 0%         0% 0%
( ) No. of respondents giving a rating                                    0%
    (i.e. excluding “Don’t know”)                                                        0               1                  2               3                      4              5                  6                   7
                                                                                    Don't            Very                                                                                                           Very
                                                                                    know             poor                                                                                                           good


                                                                                                  SEPs                                     Fund managers                                      ( ): % of all respondents




6.2     Regulation of market activities and investor protection

Q3.4 The regulation of insider trading in relation to stocks is … ..

                                 Mean                                   100%
                                                                                    (3%)           (3%)               (6%)              (12%)                    (24%)          (31%)            (18%)                   (4%)
                                 score                                  90%
                                         % of respondents by type




                                                                        80%
SEPs                   (267)      4.40
                                                                        70%
 Large SEPs             (25)      4.52                                  60%
 Small SEPs            (242)      4.38                                  50%
                                                                                                                                                                                       38%
FEPs                    (84)      4.58                                  40%
                                                                                                                                                                    25% 31%
                                                                                                                                                                              31%
                                                                                                                                                                                 28%
                                                                                                                                                                                    31%
                                                                                                                                                                                                        28%
                                                                        30%
 Large FEPs             (19)      4.89                                                                                                                     24%
                                                                                                                                                                 24%
                                                                                                                                                                                               17%
                                                                                                                                                                                                     18%
                                                                                                                                                                                                              15%
                                                                        20%
 Small FEPs             (65)      4.49                                  10%         7% 6%                            7%           8%
                                                                                                                                       14% 12%
                                                                                                                                                                                                                         6%        8%
                                                                                                   2% 3%                  3% 3%                  3%                                                                 3%
                                                                               1%            0% 3%
SOEPs                   (30)      4.73                                   0%
                                                                                                         0%                                           0%                                                                      0%


Fund Managers           (13)      4.77                                               0                1                    2                3                      4                5                    6                   7
                                                                                Don't                Very                                                                                                              Very
Overall                (394)      4.47                                          know              ineffective                                                                                                        effective

( ) No. of respondents giving a rating                                                SEPs                    FEPs                SOEPs                     Fund managers                     ( ): % of all respondents
    (i.e. excluding “Don’t know”)



Q3.5(1) The regulation of market manipulation in the stock market is … ..
                                                                                      (1%)           (3%)                 (8%)            (10%)                   (26%)          (34%)               (16%)           (3%)
                                 Mean                                   100%
                                                                         90%
                                 score
                                             % of respondents by type




                                                                         80%
SEPs                   (267)      4.38                                   70%
 Large SEPs             (25)      4.60                                   60%
                                                                         50%                                                                                                            46%
 Small SEPs            (242)      4.36
                                                                         40%                                                                                                   33%
Fund Managers           (13)      4.54                                   30%                                                                                 26%
                                                                                                                                                                       23%
                                                                         20%                                                                                                                    16% 15%
Overall                (280)      4.39                                                                                8% 8%              10% 8%
                                                                         10%
                                                                                    1%       0%    3%         0%                                                                                                    3%        0%
( ) No. of respondents giving a rating                                    0%
    (i.e. excluding “Don’t know”)                                                        0                1                 2                3                     4                5                 6                   7
                                                                                    Don't            Very                                                                                                             Very
                                                                                    know          ineffective                                                                                                       effective


                                                                                                  SEPs                                       Fund managers                                    ( ): % of all respondents




                                                                                         - 21 -                                                              Research & Planning, HKEx
                                                                                                                                                                           12 May 2005
        Secondary Market Survey 2004

Q3.5(2) FEP:      The regulation of market manipulation in the derivatives market
                  (excluding stock options) is … ..
            SOEP: The regulation of market manipulation in the stock options market is … ..
            FM:   The regulation of market manipulation in the derivatives market is … ..
                                                                                    (5%)           (1%)         (6%)          (5%)             (28%)            (32%)             (21%)        (2%)
                                                                        100%
                                 Mean
                                                                         90%
                                 score




                                             % of respondents by type
                                                                         80%

FEPs                     (89)     4.54                                   70%

 Large FEPs              (20)     4.80                                   60%
                                                                         50%
 Small FEPs              (69)     4.46                                                  36%                                                     28%             31%
                                                                         40%
                                                                                                                                                              32%
SOEPs                    (30)     4.93                                   30%
                                                                                                                                            28%         27%              27%      31%

Fund Managers             (7)     4.71                                   20%
                                                                                                                                                                               19%

                                                                                                               8%            8%                                                          9%
                                                                                    6%
                                                                         10%                                                                                                                  3%
Overall                (126)      4.64                                    0%
                                                                               1%              1% 0% 0%             3% 0%         0%
                                                                                                                                       0%                                                          0% 0%

                                                                                    0                 1             2             3               4                 5                6             7
( ) No. of respondents giving a rating
                                                                                Don't              Very                                                                                         Very
    (i.e. excluding “Don’t know”)                                               know            ineffective                                                                                   effective


                                                                                        FEPs                   SOEPs                    Fund managers                         ( ): % of all respondents



Q3.7(1) The protection of stock investors is … ..
                                                                                (0%)             (2%)          (3%)          (6%)            (19%)            (35%)            (28%)          (8%)
                                                                        100%
                                 Mean
                                                                        90%
                                 score
                                         % of respondents by type




                                                                        80%

SEPs                   (269)      4.99                                  70%
                                                                        60%
 Large SEPs             (25)      4.88
                                                                        50%
 Small SEPs            (244)      5.00                                  40%
                                                                                                                                                                        38%
                                                                                                                                                              34%               28% 31%
Fund Managers           (13)      4.92                                  30%                                                                            23%
                                                                                                                                              19%
                                                                        20%
Overall                (282)      4.98                                  10%                                                  6% 8%
                                                                                                                                                                                              8%
                                                                               0%                2%            3%                                                                                      0%
                                                                         0%             0%                0%            0%
( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)                                                   0                 1             2             3                4                5                6             7
                                                                                Don't             Very                                                                                         Very
                                                                                know              poor                                                                                         good


                                                                                               SEPs                               Fund managers                                ( ): % of all respondents




Q3.7(2) FEP:  The protection of derivatives (excluding stock options) investors is … ..
        SOEP: The protection of stock options investors is … ..
        FM:   The protection of derivatives investors is … ..
                                                                                    (2%)          (0%)          (1%)          (2%)             (17%)           (38%)             (34%)         (6%)
                                 Mean                                   100%

                                 score                                   90%
                                             % of respondents by type




                                                                         80%
FEPs                     (90)     5.21                                   70%

 Large FEPs              (20)     5.40                                   60%
                                                                                                                                                                 47%
 Small FEPs              (70)     5.16                                   50%
                                                                                                                                                              37%               34% 36%
                                                                         40%
SOEPs                    (32)     5.25                                                   27%                                                                             27%
                                                                                                                                                                                   31%
                                                                         30%
Fund Managers             (8)     5.38                                   20%
                                                                                                                                             19%
                                                                                                                                                  13% 9%
                                                                                                                                  3%                                                          7% 6%
                                                                         10%
Overall                (130)      5.23                                         0% 0%            0% 0% 0% 1% 0% 0%            2%
                                                                                                                                    0%
                                                                                                                                                                                                           0%
                                                                         0%
( ) No. of respondents giving a rating                                              0                 1             2              3                4               5                6                 7
                                                                                Don't              Very                                                                                            Very
    (i.e. excluding “Don’t know”)
                                                                                know               poor                                                                                            good


                                                                                         FEPs                   SOEPs                       Fund managers                      ( ): % of all respondents




                                                                                     - 22 -                                                   Research & Planning, HKEx
                                                                                                                                                            12 May 2005
        Secondary Market Survey 2004

6.3     Regulation of brokers

Q3.3(1) The regulation of stock brokers is … ..
                                                                                                       (1%)               (0%)        (1%)      (2%)               (20%)           (34%)            (33%)           (8%)
                                 Mean                                            100%
                                                                                              90%
                                 Score




                                             % of respondents by type
                                                                                              80%
SEPs                   (268)      5.20                                                        70%
                                         *
 Large SEPs             (25)      4.64                                                        60%
                                         *                                                    50%
 Small SEPs            (243)      5.26
                                                                                              40%                                                                                  34% 31% 33% 31%
Fund Managers           (12)      5.17                                                        30%
                                                                                                                                                                  21% 15%
                                                                                              20%
Overall                (280)      5.20                                                                         8%                                        8%                                                     9% 8%
                                                                                              10%
                                                                                                      1%                 0% 0%        1% 0%     2%
* Significantly different at 1% level.                                                        0%
( ) No. of respondents giving a rating                                                                     0                 1          2            3               4               5                6              7
    (i.e. excluding “Don’t know”)                                                                     Don't                Very                                                                                   Very
                                                                                                      know              ineffective                                                                             effective


                                                                                                                      SEPs                       Fund managers                                 ( ): % of all respondents




Q3.3(2) FEP:  The regulation of futures brokers is … ..
        SOEP: The regulation of stock options brokers is … ..
        FM:   The regulation of futures brokers is … ..
                                                                                                      (5%)               (0%)         (0%)      (5%)               (14%)             (38%)            (33%)              (6%)
                                 Mean                                           100%

                                 score                                                    90%
                                             % of respondents by type




                                                                                          80%
FEPs                     (89)     5.20                                                    70%

 Large FEPs              (20)     5.55                                                    60%
                                                                                                               45%
 Small FEPs              (69)     5.10                                                    50%                                                                                      41%
                                                                                                                                                                                     38%
                                                                                                                                                                                                         44%
                                                                                          40%
SOEPs                    (32)     5.22                                                                                                                                                             30%        27%
                                                                                          30%
Fund Managers             (6)     5.83                                                    20%                                                                        16%                     18%
                                                                                                                                                                  14%                                                         9%
                                                                                                                                                6%                                                                  8%
                                                                                          10%
Overall                (127)      5.24                                                               1% 0%              0% 0% 0% 0% 0% 0%            3%
                                                                                                                                                             0%              0%                                          0%
                                                                                              0%
( ) No. of respondents giving a rating                                                                  0                    1          2            3                   4               5                6              7
                                                                                                      Don't                Very                                                                                        Very
    (i.e. excluding “Don’t know”)
                                                                                                      know              ineffective                                                                                  effective


                                                                                                               FEPs                   SOEPs                   Fund managers                        ( ): % of all respondents




Q3.6(1) The business conduct of stock brokers is … ..
                                                                                                               (1%)          (0%)       (0%)         (3%)           (19%)            (40%)           (30%)           (7%)
                                 Mean                                                         100%
                                                                                               90%
                                 score
                                                                   % of respondents by type




                                                                                               80%
SEPs                   (268)      5.16                                                         70%

 Large SEPs             (25)      4.84                                                         60%
                                                                                               50%                                                                                        46%
 Small SEPs            (243)      5.20                                                                                                                                              40%
                                                                                               40%
Fund Managers           (13)      5.00                                                         30%
                                                                                                                                                                                                    30% 31%

                                                                                                                                                                   19%
                                                                                               20%                                                                           15%
Overall                (281)      5.16                                                                                                                       8%                                                     7%
                                                                                               10%
                                                                                                       1%                  0% 0%       0% 0%     3%
                                                                                                                   0%                                                                                                        0%
( ) No. of respondents giving a rating                                                          0%
    (i.e. excluding “Don’t know”)                                                                              0                 1          2            3               4               5                6              7
                                                                                                        Don't                Very                                                                                    Very
                                                                                                        know                 poor                                                                                    good


                                                                                                                         SEPs                            Fund managers                             ( ): % of all respondents




                                                                                                               - 23 -                                                    Research & Planning, HKEx
                                                                                                                                                                                       12 May 2005
        Secondary Market Survey 2004

Q3.6(2) FEP:  The business conduct of futures brokers is … ..
        SOEP: The business conduct of stock options brokers is … ..
        FM:   The business conduct of futures brokers is … ..
                                                                                           (5%)           (0%)        (1%)    (1%)           (17%)           (36%)        (33%)       (8%)
                                 Mean                                            100%

                                 score                                            90%




                                                      % of respondents by type
                                                                                  80%
FEPs                     (88)     5.35                                            70%

 Large FEPs              (20)     5.55                                            60%

 Small FEPs              (68)     5.29                                            50%
                                                                                               36%
                                                                                                                                                              41%
                                                                                                                                                           34% 36% 37%
                                                                                  40%
SOEPs                    (31)     5.10                                                                                                                                    25%
                                                                                                                                                                             27%
                                                                                  30%
Fund Managers             (7)     5.43                                            20%
                                                                                                                                           17%
                                                                                                                                                 22%

                                                                                                                                 3%                                                9% 6%
                                                                                  10%
Overall                (126)      5.29                                                  2% 3%        0% 0% 0%    1%
                                                                                                                      0% 0% 0%        0%              0%                                      0%
                                                                                   0%
( ) No. of respondents giving a rating                                                     0              1           2           3               4              5            6           7
                                                                                        Don't            Very                                                                          Very
    (i.e. excluding “Don’t know”)
                                                                                        know             poor                                                                          good


                                                                                                FEPs              SOEPs                 Fund managers                ( ): % of all respondents




6.4     Overall regulation  local vs overseas

Q3.8(1) In comparison with overseas markets, overall regulation in HK of stock brokers is … ..
                                                                                         (23%)           (0%)     (0%)       (0%)           (15%)           (38%)      (23%)        (0%)
                                                                                 100%
                                 Mean
                                                                                 90%
                                         % of respondents by type




                                 score                                           80%

Fund Managers            (10)     5.10                                           70%
                                                                                 60%
Overall                  (10)     5.10                                           50%
                                                                                                                                                             38%
                                                                                 40%
( ) No. of respondents giving a rating
                                                                                 30%      23%                                                                            23%
    (i.e. excluding “Don’t know”)
                                                                                 20%                                                         15%

                                                                                 10%
                                                                                                         0%           0%      0%                                                      0%
                                                                                  0%
                                                                                           0              1           2           3              4            5           6               7
                                                                                         Don't         Much                                                                         Much
                                                                                         know          weaker                                                                      stronger

                                                                                                                  Fund Managers                                      ( ): % of all respondents



Q3.8(2) In comparison with overseas markets, overall regulation in HK of futures brokers
        is … ..
                                                                                           (50%)          (0%)        (0%)       (0%)        (0%)           (30%)       (20%)       (0%)
                                                                                 100%
                                 Mean                                             90%
                                                      % of respondents by type




                                 score                                            80%

Fund Managers              (5)    5.40                                            70%
                                                                                  60%
                                                                                          50%
Overall                    (5)    5.40                                            50%
                                                                                  40%
( ) No. of respondents giving a rating                                                                                                                      30%
                                                                                  30%
    (i.e. excluding “Don’t know”)                                                                                                                                       20%
                                                                                  20%
                                                                                  10%
                                                                                                          0%          0%      0%                 0%                                  0%
                                                                                   0%
                                                                                            0              1          2           3              4           5            6           7
                                                                                           Don't        Much                                                                        Much
                                                                                           know         weaker                                                                    stronger

                                                                                                                  Fund Managers                                      ( ): % of all respondents




                                                                                               - 24 -                                       Research & Planning, HKEx
                                                                                                                                                          12 May 2005
        Secondary Market Survey 2004

Q3.9 In comparison with overseas markets, overall listed company regulation in Hong Kong
     is … ..
                                                                                          (15%)           (0%)           (0%)       (0%)           (31%)          (31%)            (23%)       (0%)
                                                                                   100%
                                 Mean
                                                                                   90%




                                         % of respondents by type
                                 Score
                                                                                   80%
Fund Managers            (11)     4.91                                             70%
                                                                                   60%
Overall                  (11)     4.91                                             50%

( ) No. of respondents giving a rating                                             40%
                                                                                                                                                   31%            31%
    (i.e. excluding “Don’t know”)                                                  30%                                                                                              23%
                                                                                   20%    15%

                                                                                   10%
                                                                                                           0%            0%         0%                                                           0%
                                                                                    0%
                                                                                            0               1             2          3              4              5                 6            7
                                                                                          Don't          Much                                                                                  Much
                                                                                          know           weaker                                                                               stronger

                                                                                                                         Fund Managers                                           ( ): % of all respondents




7.      MARKET AND ISSUER INFORMATION

7.1     Issuer information

Q4.1(1) The content of information disclosure by listed companies on the Main board is … ..
                                                                                            (1%)           (1%)           (0%)       (5%)           (26%)          (48%)             (17%)        (2%)
                                                                                   100%
                                 Mean
                                                                                    90%
                                 score
                                                     % of respondents by type




                                                                                    80%
SEPs                   (267)      4.81                                              70%
                                                                                    60%
 Large SEPs             (24)      4.79                                                                                                                            47%
                                                                                                                                                                            54%
                                                                                    50%
 Small SEPs            (243)      4.81
                                                                                    40%
Fund Managers           (13)      4.69                                              30%                                                            26%
                                                                                                                                             15%            15%                     17% 15%
                                                                                    20%
Overall                (280)      4.81                                              10%                                             5%
                                                                                          1% 0%           1% 0%          0% 0%                                                                  2% 0%
( ) No. of respondents giving a rating                                               0%
    (i.e. excluding “Don’t know”)                                                              0                1             2          3               4              5                6            7
                                                                                          Don't           Very                                                                                    Very
                                                                                          know            poor                                                                                    good


                                                                                                         SEPs                            Fund managers                            ( ): % of all respondents



Q4.1(2) The content of information disclosure by listed companies on GEM is … ..
                                                                                                (3%)            (4%)      (9%)       (20%)           (32%)          (24%)             (8%)      (0%)
                                                                                   100%
                                 Mean
                                                                                    90%
                                 score
                                                        % of respondents by type




                                                                                    80%
SEPs                   (262)      3.90                                              70%
                                                                                    60%
 Large SEPs             (24)      4.17
                                                                                    50%
 Small SEPs            (238)      3.87                                              40%                                                                  36%
                                                                                                                                                   32%
Fund Managers           (10)      3.80                                              30%
                                                                                                                                          27%                     25%
                                                                                                                                   19%
                                                                                    20%
Overall                (272)      3.90                                              10%
                                                                                                    9%    4%             9% 9%                                              9%      7% 9%
                                                                                          3%                        0%                                                                          0% 0%
( ) No. of respondents giving a rating                                               0%
    (i.e. excluding “Don’t know”)                                                               0               1             2          3              4           5                    6            7
                                                                                           Don't           Very                                                                                  Very
                                                                                           know            poor                                                                                  good


                                                                                                         SEPs                            Fund managers                            ( ): % of all respondents



                                                                                                - 25 -                                             Research & Planning, HKEx
                                                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

Q4.2(1) The timeliness of information disclosure by listed companies on the Main Board is … ..
                                                                                       (1%)            (1%)       (1%)           (8%)              (31%)          (40%)            (16%)           (2%)
                                                                           100%
                                 Mean
                                                                            90%
                                 score




                                                % of respondents by type
                                                                            80%
SEPs                   (267)      4.65                                      70%
                                                                            60%
 Large SEPs             (25)      4.80
                                                                            50%
 Small SEPs            (242)      4.63                                      40%
                                                                                                                                                              40% 38%

Fund Managers           (13)      4.54                                      30%
                                                                                                                                               31%
                                                                                                                                                        23%                            23%
                                                                            20%                                                                                                16%
Overall                (280)      4.64                                      10%
                                                                                                           8%                  8% 8%
                                                                                  1%              1%             1% 0%                                                                            2% 0%
                                                                                           0%
( ) No. of respondents giving a rating                                      0%
    (i.e. excluding “Don’t know”)                                                      0               1              2              3              4                 5                6               7
                                                                                   Don't           Very                                                                                            Very
                                                                                   know            poor                                                                                            good


                                                                                                 SEPs                                Fund managers                            ( ): % of all respondents



Q4.2(2) The timeliness of information disclosure by listed companies on GEM is … ..
                                                                                    (3%)           (3%)          (8%)           (21%)              (34%)          (23%)            (8%)            (1%)
                                                                           100%
                                 Mean
                                                                           90%
                                 score
                                             % of respondents by type




                                                                           80%
SEPs                   (262)      3.94                                     70%
                                                                           60%
 Large SEPs             (25)      4.16                                                                                                              45%
                                                                           50%
 Small SEPs            (237)      3.91                                     40%
Fund Managers           (10)      4.10                                     30%
                                                                                                                                              34%
                                                                                                                              22%                             23%
                                                                                                                                                                                    18%
                                                                           20%
Overall                (272)      3.94                                     10%
                                                                                           9%              9%   9%                      9%                            9%      7%
                                                                                  2%             3%                      0%                                                                   1% 0%
( ) No. of respondents giving a rating                                      0%
    (i.e. excluding “Don’t know”)                                                      0               1             2              3              4              5                6               7
                                                                                   Don't          Very                                                                                           Very
                                                                                   know           poor                                                                                           good


                                                                                                SEPs                                Fund managers                           ( ): % of all respondents




7.2     Market information
Q4.3(1) Real-time trading data available for the Hong Kong stock market is … ..
                                                                                   (1%)           (0%)          (1%)          (3%)           (11%)         (31%)            (41%)            (11%)
                                 Mean                                      100%
                                                                           90%
                                 score
                                                % of respondents by type




                                                                           80%
                                         ^
SEPs                   (265)      5.41                                     70%
 Large SEPs             (24)      5.67                                     60%
                                                                           50%                                                                                                   46%
 Small SEPs            (241)      5.39                                                                                                                                     41%
                                         ^                                 40%
Fund Managers           (13)      6.08                                     30%
                                                                                                                                                           31%                                   31%
                                                                                                                                                                  23%
                                                                           20%
Overall                (278)      5.44                                                                                                       11%                                           10%
                                                                           10%
                                                                                  1% 0%          0% 0%          1% 0%         3% 0%                0%
^ Significantly different at 5% level.                                      0%
( ) No. of respondents giving a rating                                              0              1              2             3              4              5                6              7
    (i.e. excluding “Don’t know”)                                                 Don't           Very                                                                                      Very
                                                                                  know            poor                                                                                      good


                                                                                                SEPs                            Fund managers                             ( ): % of all respondents




                                                                                       - 26 -                                                  Research & Planning, HKEx
                                                                                                                                                             12 May 2005
        Secondary Market Survey 2004

Q4.3(2) FEP:      Real-time trading data available for the Hong Kong derivatives market
                  (excluding stock options) is … ..
            SOEP: Real-time trading data available for the Hong Kong stock options market
                  is … ..
            FM:   Real-time trading data available for the Hong Kong derivatives market is … ..
                                                                                                           (3%)         (0%)    (3%)          (6%)            (15%)          (32%)              (33%)         (8%)
                                 Mean                                                          100%

                                 Score                                                          90%




                                                                    % of respondents by type
                                                                                                80%
                                         ^
FEPs                     (89)     5.18                                                          70%
 Large FEPs              (19)     5.32                                                          60%

 Small FEPs              (70)     5.14                                                          50%
                                                                                                                                                                               34%        37%
                                         ^                                                      40%
SOEPs                    (32)     4.81                                                                          27%                                             28%         33%
                                                                                                                                                                                                 25%
                                                                                                                                                                                                    27%              27%
                                         ^                                                      30%
Fund Managers             (8)     6.00                                                          20%                                                          11%       9%           9%
                                                                                                                                    3%        7% 6%                                                         8%
Overall                (129)      5.14                                                          10%   1% 0%           0% 0% 0% 3%        0%            0%                                                        3%
                                                                                                 0%
^ Significantly different at 5% level.                                                                     0             1          2              3               4           5                  6              7

( ) No. of respondents giving a rating                                                                  Don't           Very                                                                                  Very
                                                                                                        know            poor                                                                                  good
    (i.e. excluding “Don’t know”)
                                                                                                                FEPs             SOEPs                      Fund managers                 ( ): % of all respondents




Q4.4(1) Historical trading data available for the Hong Kong Main Board is … ..
                                                                                                       (1%)            (0%)     (1%)          (5%)            (18%)          (38%)              (32%)         (5%)
                                                                                         100%
                                 Mean
                                                                                               90%
                                 score
                                                     % of respondents by type




                                                                                               80%
SEPs                   (267)      5.10                                                         70%
                                                                                                                                                                                                      62%
                                                                                               60%
 Large SEPs             (25)      5.00
                                                                                               50%
 Small SEPs            (242)      5.11                                                                                                                                       38%
                                                                                               40%
Fund Managers           (12)      5.67                                                         30%
                                                                                                                                                                                   31%         30%

                                                                                                                                                              19%
                                                                                               20%
Overall                (279)      5.12                                                                         8%
                                                                                                                                              5%                                                              6%
                                                                                               10%
                                                                                                      1%               0% 0%    1% 0%                  0%              0%                                              0%
( ) No. of respondents giving a rating                                                          0%
    (i.e. excluding “Don’t know”)                                                                          0             1          2              3               4            5                 6                7
                                                                                                       Don't            Very                                                                                     Very
                                                                                                       know             poor                                                                                     good


                                                                                                                      SEPs                       Fund managers                                ( ): % of all respondents




Q4.4(2) Historical trading data available for the Hong Kong GEM is … ..
                                                                                                           (3%)          (1%)       (4%)           (7%)            (27%)           (28%)              (24%)            (5%)
                                                                                  100%
                                 Mean
                                                                                               90%
                                 score
                                             % of respondents by type




                                                                                               80%
SEPs                   (260)      4.74                                                         70%
                                                                                               60%
 Large SEPs             (24)      4.96
                                                                                               50%
 Small SEPs            (236)      4.72                                                         40%
Fund Managers            (9)      4.78                                                         30%                                                             27% 27%        29%                      27%
                                                                                                                                                                                                24%
                                                                                                           18%                                                                          18%
                                                                                               20%
Overall                (269)      4.74                                                         10%                              4%             7% 9%                                                             5%
                                                                                                      3%              1% 0%              0%                                                                                0%
( ) No. of respondents giving a rating                                                         0%
    (i.e. excluding “Don’t know”)                                                                          0             1           2             3                   4            5                 6                7
                                                                                                       Don't            Very                                                                                      Very
                                                                                                       know             poor                                                                                      good


                                                                                                                      SEPs                         Fund managers                               ( ): % of all respondents




                                                                                                               - 27 -                                            Research & Planning, HKEx
                                                                                                                                                                               12 May 2005
        Secondary Market Survey 2004

Q4.4(3) FEP:      Historical trading data available for the Hong Kong derivatives market
                  (excluding stock options) is … ..
            SOEP: Historical trading data available for the Hong Kong stock options market
                  is … ..
            FM:   Historical trading data available for the Hong Kong derivatives market is … ..
                                                                                         (5%)          (0%)          (5%)         (8%)            (21%)         (35%)          (25%)       (2%)
                                 Mean                                   100%

                                 score                                  90%




                                             % of respondents by type
                                                                        80%
FEPs                     (90)     4.81                                  70%
 Large FEPs              (20)     4.85                                  60%
                                                                                          45%
 Small FEPs              (70)     4.80                                  50%
                                                                                                                                                             38%
                                                                        40%                                                                                     34%
SOEPs                    (31)     4.61                                                                                                            28%
                                                                                                                                                                        26% 27%
                                                                        30%
Fund Managers             (6)     5.33                                  20%
                                                                                                                                            20%                      18%   22%

                                                                                    3%                                         9% 6%                    9%
                                                                                                                     6%
Overall                (127)      4.79                                  10%
                                                                               0%                0% 0% 0%       4%        0%           0%                                              3% 0% 0%
                                                                         0%
( ) No. of respondents giving a rating                                               0                 1             2            3                 4           5                6         7

    (i.e. excluding “Don’t know”)                                               Don't              Very                                                                                   Very
                                                                                know               poor                                                                                   good


                                                                                          FEPs                   SOEPs                      Fund managers                 ( ): % of all respondents




8.      THE EXCHANGE’S PRODUCTS AND SERVICES

8.1                  s
        The Exchange’ products

Q5.1(1) In the Hong Kong stock market, there are … .. good quality listed companies for
        investment.
                                                                                      (1%)             (2%)          (2%)        (9%)             (21%)        (37%)         (24%)        (5%)
                                                                        100%
                                 Mean
                                                                        90%
                                 score
                                             % of respondents by type




                                                                        80%
                                         ^
SEPs                   (268)      4.78                                  70%
                                                                        60%
 Large SEPs             (24)      4.88                                                                                                                                           46%
                                                                        50%
 Small SEPs            (244)      4.77                                  40%
                                                                                                                                                             37%
                                         ^
Fund Managers           (13)      5.46                                  30%
                                                                                                                                                                    31%

                                                                                                                                              21%                          23%
                                                                        20%                                                                         15%
Overall                (281)      4.81                                  10%
                                                                                                                               10%                                                     4% 8%
                                                                                1% 0%             2%       0%   2%       0%           0%
^ Significantly different at 5% level.                                   0%
( ) No. of respondents giving a rating                                                0                1             2            3                4            5              6          7
    (i.e. excluding “Don’t know”)                                                   Don't          Too                                                                                 Plenty
                                                                                    know           few                                                                                   of


                                                                                                SEPs                             Fund managers                            ( ): % of all respondents




                                                                                          - 28 -                                                  Research & Planning, HKEx
                                                                                                                                                                12 May 2005
        Secondary Market Survey 2004

Q5.1(2) FEP:      There are … .. good products in the Exchange's derivatives market
                  (excluding stock options).
            SOEP: There are … .. good options classes in the Exchange's stock options market.
            FM:   There are … .. good products in the Exchange's derivatives market.
                                                                                              (2%)          (3%)     (8%)         (10%)          (33%)            (29%)           (13%)            (2%)
                                   Mean                                              100%
                                                                                      90%
                                   score




                                                          % of respondents by type
                                                                                      80%
FEPs                      (90)     4.08                                               70%

 Large FEPs               (20)     4.20                                               60%
                                                                                      50%
 Small FEPs               (70)     4.04                                                                                                       39%                 41%
                                                                                      40%
SOEPs                     (32)     4.69                                               30%
                                                                                                   30%
                                                                                                                                                        30%
                                                                                                                                                              26%
                                                                                                                                                                        20%       22%
Fund Managers              (7)     4.29                                               20%
                                                                                                                                                  19%

                                                                                                                    8% 9%10% 12%6%                                            10%       10%        3%
                                                                                      10%
Overall                 (129)      4.24                                                     0% 0%          4%
                                                                                                              0% 0%               0%                                                          1%        0%
                                                                                       0%
                                                                                               0              1        2            3               4               5               6              7
( ) No. of respondents giving a rating
                                                                                             Don't           Too                                                                               Plenty
    (i.e. excluding “Don’t know”)                                                            know            few                                                                                 of


                                                                                                    FEPs            SOEPs                   Fund managers                    ( ): % of all respondents




8.2                  s
        The Exchange’ clearing and settlement services

Q5.2 SEP:     The clearing and settlement service provided by HK Securities Clearing Company
              is … ..
        FEP:  The clearing and settlement service provided by HKFE Clearing Corporation
              is … ..
        SOEP: The clearing and settlement service provided by SEHK Options Clearing House
              is … ..
                                                                                             (0%)           (0%)     (1%)         (2%)           (16%)            (37%)             (36%)               (10%)
                                   Mean                                              100%
                                                                                     90%
                                   score
                                               % of respondents by type




                                                                                     80%
                                           ^
SEPs                    (270)      5.49                                              70%
                                                                                     60%
 Large SEPs              (25)      5.32                                                                                                                                     50%
                                                                                     50%
 Small SEPs             (245)      5.51                                                                                                                       35% 38%             40%
                                           ^                                         40%
FEPs                     (90)      5.02                                              30%                                                            26%
                                                                                                                                                            22%
                                                                                                                                                                                        27% 28%

 Large FEPs              (20)      5.30                                              20%
                                                                                                                                                 11%                                           12%
                                                                                                                                       3%
 Small FEPs              (70)      4.94                                              10%
                                                                                            0% 0% 0% 0% 0% 0%       0% 1% 0%      1%        0%
                                                                                                                                                                                                         6%
                                                                                                                                                                                                              0%
                                           ^                                          0%
SOEPs                    (32)      5.06
                                                                                               0              1        2                3               4               5               6                7
                                                                                             Don't          Very                                                                                    Very
Overall                 (392)      5.35                                                      know           poor                                                                                    good

^ Significantly different at 0.1% level.
( ) No. of respondents giving a rating                                                               SEPs                  FEPs                     SOEPs                         ( ): % of all respondents
    (i.e. excluding “Don’t know”)




                                                                                                   - 29 -                                              Research & Planning, HKEx
                                                                                                                                                                     12 May 2005
        Secondary Market Survey 2004

Q5.3 The nominee services provided by Hong Kong Securities Clearing Company are … ..
                                                                                                      (5%)           (0%)              (1%)       (1%)         (17%)         (39%)            (31%)         (6%)
                                 Mean                                                      100%
                                                                                           90%
                                 score




                                                                % of respondents by type
                                                                                           80%
SEPs                   (260)      5.20                                                     70%

 Large SEPs             (23)      5.04                                                     60%
                                                                                           50%
 Small SEPs            (237)      5.22                                                                                                                                       40%                   42%
                                                                                           40%
Fund Managers            (9)      5.22                                                     30%             25%                                                         25%
                                                                                                                                                                                             30%

                                                                                           20%                                                                 17%
Overall                (269)      5.20                                                     10%
                                                                                                                                                                                      8%                    7%
                                                                                                    4%              0%       0%        1% 0%      1% 0%                                                              0%
( ) No. of respondents giving a rating                                                      0%
    (i.e. excluding “Don’t know”)                                                                          0             1                  2          3              4           5                6             7
                                                                                                      Don't           Very                                                                                   Very
                                                                                                      know            poor                                                                                   good


                                                                                                                  SEPs                                 Fund managers                        ( ): % of all respondents




8.3                  s
        The Exchange’ fees

Q5.4 SEP:     The Exchange's trading fees for the stock market are … ..
     FEP:     The Exchange's trading fees for the derivatives market (excluding stock options)
              are … ..
        SOEP: The Exchange's trading fees for the stock options market are … ..
                                                                                                    (0%)           (3%)            (6%)          (14%)         (37%)         (28%)            (10%)           (3%)
                                 Mean                                   100%

                                 score                                             90%
                                         % of respondents by type




                                                                                   80%
SEPs                   (269)      4.28                                             70%
 Large SEPs             (24)      4.38                                             60%
                                                                                   50%
 Small SEPs            (245)      4.27                                                                                                                      39%
                                                                                   40%                                                                            32%
FEPs                    (90)      4.04                                             30%
                                                                                                                                                                    25% 29%
                                                                                                                                                                          26%
                                                                                                                                                                              25%
                                                                                                                                                                                                22%
 Large FEPs             (20)      3.65                                             20%
                                                                                                                                                  20%16%
                                                                                                                    7%                      9% 11%                                         9%11%
 Small FEPs             (70)      4.16                                             10%
                                                                                                  0% 0% 0% 2%            3%
                                                                                                                                  6%
                                                                                                                                       3%                                                              4% 1% 0%
                                                                                           0%
SOEPs                   (32)      4.25
                                                                                                     0               1                 2           3              4           5                6             7

Overall                (391)      4.23                                                             Don't
                                                                                                   know
                                                                                                                   Very
                                                                                                               unreasonable
                                                                                                                                                                                                            Very
                                                                                                                                                                                                         reasonable

( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)                                                                          SEPs                        FEPs                   SOEPs                        ( ): % of all respondents




                                                                                                         - 30 -                                                    Research & Planning, HKEx
                                                                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

Q5.5 SEP:     The Exchange's clearing and settlement fees for the stock market are … ..
     FEP:     The Exchange's clearing and settlement fees for the derivatives market (excluding
              stock options) are … ..
        SOEP: The Exchange's clearing and settlement fees for the stock options market are … ..
                                                                                                               (0%)           (3%)           (6%)           (16%)                (37%)           (23%)           (12%)        (3%)
                                 Mean                                      100%

                                 score                                                90%




                                         % of respondents by type
                                                                                      80%
SEPs                   (269)      4.22                                                70%
 Large SEPs             (24)      4.25                                                60%
                                                                                      50%
 Small SEPs            (245)      4.22                                                                                                                                        39% 36%
                                                                                      40%
FEPs                    (89)      4.06                                                30%
                                                                                                                                                                                       28% 23% 25%
                                                                                                                                                             20%19%                          21%                    19%
 Large FEPs             (20)      3.60                                                20%
                                                                                                                                                          15%
                                                                                                                                                                                                              10%12%
                                                                                                                                            7%     6%                                                                   4%
 Small FEPs             (69)      4.19                                                10%
                                                                                                             0% 0% 0%       1%
                                                                                                                                 6%
                                                                                                                                      3%
                                                                                                                                                 3%
                                                                                                                                                                                                                              1% 0%
                                                                                                0%
SOEPs                   (32)      4.22
                                                                                                                0                1               2                3                4              5               6           7

Overall                (390)      4.18                                                                        Don't
                                                                                                              know
                                                                                                                              Very
                                                                                                                          unreasonable
                                                                                                                                                                                                                             Very
                                                                                                                                                                                                                          reasonable

( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)                                                                                    SEPs                        FEPs                            SOEPs                        ( ): % of all respondents




8.4                  s
        The Exchange’ technical support

Q5.6(1) Within its scope of services for the stock market trading system (AMS/3), the technical
        support offered by the Exchange is … ..
                                                                                                                (1%)           (0%)           (0%)               (4%)             (16%)          (43%)            (29%)        (6%)
                                 Mean                                                                 100%
                                                                                                      90%
                                 score
                                                                    % of respondents by type




                                                                                                      80%
SEPs                   (267)      5.15                                                                70%

 Large SEPs             (24)      5.00                                                                60%

 Small SEPs            (243)      5.16                                                                50%
                                                                                                                                                                                                  43%
                                                                                                      40%
Overall                (267)      5.15                                                                30%
                                                                                                                                                                                                                 29%


                                                                                                      20%                                                                          16%
( ) No. of respondents giving a rating
                                                                                                      10%                                                                                                                      6%
    (i.e. excluding “Don’t know”)                                                                                   1%               0%              0%
                                                                                                                                                                      4%
                                                                                                       0%
                                                                                                                   0                1                2                3                4              5               6         7
                                                                                                                 Don't           Very                                                                                         Very
                                                                                                                 know            poor                                                                                         good

                                                                                                                                                          SEPs                                                 ( ): % of all respondents


Q5.6(2) Within its scope of services for the derivatives market trading system (HKATS), the
        technical support offered by the Exchange is … ..
                                                                                                                    (1%)          (0%)           (4%)             (9%)             (26%)              (35%)           (22%)        (3%)
                                 Mean                                                                 100%

                                 score                                                                 90%
                                                                           % of respondents by type




                                                                                                       80%
FEPs                     (88)     4.77                                                                 70%
 Large FEPs              (20)     5.10                                                                 60%

 Small FEPs              (68)     4.68                                                                 50%
                                                                                                       40%
SOEPs                    (32)     4.59                                                                                                                                                     28%
                                                                                                                                                                                                 35% 34%
                                                                                                       30%                                                                        25%
                                                                                                                                                                                                                22% 22%
Overall                (120)      4.73                                                                 20%
                                                                                                                                                                  8%
                                                                                                                                                                           13%
                                                                                                       10%       1% 0%                           4 % 3%                                                                       4%
                                                                                                                                 0% 0%
( ) No. of respondents giving a rating                                                                  0%
                                                                                                                                                                                                                                       0%

    (i.e. excluding “Don’t know”)                                                                                     0               1               2                   3            4                  5           6            7
                                                                                                                    Don't            Very                                                                                     Very
                                                                                                                    know             poor                                                                                     good


                                                                                                                                      FEPs                                       SOEPs                          ( ): % of all respondents

                                                                                                                    - 31 -                                                        Research & Planning, HKEx
                                                                                                                                                                                                12 May 2005
        Secondary Market Survey 2004

Q5.7(1) Within its scope of services for the stock market clearing and settlement system
        (CCASS), the technical support offered by the Exchange is … ..
                                                                                                            (1%)        (0%)          (1%)                (3%)         (19%)            (41%)         (28%)             (7%)
                                 Mean                                         100%

                                 score                                                     90%




                                         % of respondents by type
                                                                                           80%
SEPs                   (268)      5.15                                                     70%
 Large SEPs             (24)      4.79                                                     60%

 Small SEPs            (244)      5.18                                                     50%
                                                                                                                                                                                          41%
                                                                                           40%
Overall                (268)      5.15                                                     30%
                                                                                                                                                                                                         28%

                                                                                                                                                                          19%
( ) No. of respondents giving a rating                                                     20%
                                                                                                                                                                                                                            7%
    (i.e. excluding “Don’t know”)                                                          10%
                                                                                                            1%              0%          1%
                                                                                                                                                            3%
                                                                                                    0%
                                                                                                             0            1                2                 3             4               5                 6            7
                                                                                                           Don't        Very                                                                                            Very
                                                                                                           know         poor                                                                                            good

                                                                                                                                                   SEPs                                               ( ): % of all respondents


Q5.7(2) Within its scope of services for the derivatives market clearing and settlement system
        (DCASS), the technical support offered by the Exchange is … ..
                                                                                                             (1%)            (1%)          (4%)             (12%)         (22%)            (36%)             (21%)           (3%)
                                 Mean                                                               100%

                                 score                                                              90%
                                                                % of respondents by type




                                                                                                    80%
FEPs                     (88)     4.63                                                              70%
 Large FEPs              (20)     4.85                                                              60%
                                                                                                                                                                                               47%
 Small FEPs              (68)     4.56                                                              50%
                                                                                                    40%
SOEPs                    (32)     4.69                                                                                                                                   26%            31%
                                                                                                    30%
                                                                                                                                                                                                       20% 2 2 %
                                                                                                                                                                 16%
Overall                (120)      4.64                                                              20%
                                                                                                                                       4%                  11%                    13%                                4%
                                                                                                    10%     1% 0 %                                 3%
                                                                                                                            1% 0%
( ) No. of respondents giving a rating                                                               0%
                                                                                                                                                                                                                                0%

    (i.e. excluding “Don’t know”)                                                                                0                1            2                 3            4               5              6              7
                                                                                                              Don't          Very                                                                                       Very
                                                                                                              know           poor                                                                                       good


                                                                                                                             FEPs                                      SOEPs                          ( ): % of all respondents


Q5.8 SEP:     The assistance offered by the Exchange to brokers in developing online stock
              trading is … ..
        FEP:  The assistance offered by the Exchange to brokers in developing online
              derivatives trading (excluding stock options) is … ..
        SOEP: The assistance offered by the Exchange to brokers in developing online stock
              options trading is … .
                                 Mean                                                                       (27%)           (2%)       (6%)               (12%)          (23%)           (22%)          (8%)         (1%)
                                                                                                    100%
                                 score                                                              90%
                                                                         % of respondents by type




                                                                                                    80%
SEPs                   (190)      4.11                                                              70%
 Large SEPs             (18)      4.56                                                              60%
 Small SEPs            (172)      4.06                                                              50%
                                                                                                    40% 29% 31%
FEPs                    (74)      4.41                                                                                                                           25%
                                                                                                                                                                    25% 24%
                                                                                                    30%
 Large FEPs             (19)      4.47                                                                     17%                                            18% 22%      22% 22%
                                                                                                    20%                                                                          11%
                                                                                                                                                            9%
 Small FEPs             (55)      4.38                                                                                                7%           6% 10%                      7% 6%
                                                                                                                                                                                                                        3%
                                                                                                    10%                 2% 0%0%            2%
                                                                                                                                                                                                                   1%        0%
SOEPs                   (22)      4.18                                                               0%
                                                                                                              0               1            2                 3            4               5              6              7
Overall                (286)      4.19                                                                       Don't          Very                                                                                     Very
                                                                                                             know           poor                                                                                     good
( ) No. of respondents giving a rating
   (i.e. excluding “Don’t know”)                                                                                     SEPs                      FEPs                      SOEPs                       ( ): % of all respondents



                                                                                                                   - 32 -                                                 Research & Planning, HKEx
                                                                                                                                                                                        12 May 2005
        Secondary Market Survey 2004

8.5                  s
        The Exchange’ other services

Q5.9 The Exchange's consultation on market and product development is … ..
                                                                                               (6%)                 (1%)              (4%)                (13%)              (33%)               (33%)            (9%)              (1%)
                                 Mean                                                  100%

                                 score                                                 90%




                                                        % of respondents by type
                                                                                       80%
SEPs                   (249)      4.32                                                 70%
 Large SEPs             (25)      4.60                                                 60%
 Small SEPs            (224)      4.29                                                 50%
                                                                                                                                                                             34% 38%
                                                                                                                                                                                              42%
                                                                                                                                                                                       33%
FEPs                    (89)      4.39                                                 40%
                                                                                                                                                                           33%     33%   34%
                                                                                                                                                                                            28%
                                                                                       30%                   25%
 Large FEPs             (20)      4.55                                                                                                                      16%
                                                                                                                                                               16%                                                     13%
                                                                                       20%
 Small FEPs             (69)      4.35                                                 10%
                                                                                              8%        3%                              3%
                                                                                                                                                      12%                                                     9% 12%
                                                                                                                   1% 0% 0%                  3%                                                                                  1% 1% 0%
SOEPs                   (31)      4.32                                                             0%                            0% 4%               0%               0%                                                    0%            0%
                                                                                        0%
Fund Managers            (9)      4.56                                                              0                    1                   2                3                    4               5                6                 7
                                                                                                   Don't              Very                                                                                                          Very
Overall                (378)      4.34                                                             know               poor                                                                                                          good


( ) No. of respondents giving a rating                                                                  SEPs                  FEPs                   SOEPs                  Fund managers                    ( ): % of all respondents
    (i.e. excluding “Don’t know”)



Q5.11       Channels for communication with the Exchange are … ..

                                 Mean                                                  100%
                                                                                                    (2%)              (1%)               (3%)               (10%)                (32%)            (34%)              (16%)                (1%)

                                 Score                                                  90%
                                                            % of respondents by type




                                                                                        80%
SEPs                   (263)      4.41                                                  70%
                                         *
 Large SEPs             (24)      4.88                                                  60%
                                         *
 Small SEPs            (239)      4.36                                                  50%
                                                                                                                                                                                                         38%
                                                                                                                                                                                                 34%   38%
FEPs                    (88)      4.66                                                  40%                                                                                  33%
                                                                                                                                                                                   34%
                                                                                                                                                                                           28%
                                                                                                                                                                                              31%
                                                                                                                                                                                                     29%                     23%
 Large FEPs             (20)      4.80                                                  30%
                                                                                                                                                                                                                     21%22%
                                                                                        20%
 Small FEPs             (68)      4.62                                                                        8%                        4%                  9%11%
                                                                                                                                                                      13%                                        13%
                                                                                        10%                         2%                                                                                                             1% 2 % 0 % 0 %
SOEPs                   (32)      4.69                                                   0%
                                                                                              3 % 1 % 0%                 0 % 0% 0%           1% 0% 0%                   0%


Fund Managers           (12)      4.92                                                                  0                    1                   2                3                    4               5                 6                7
                                                                                                    Don't                 Very                                                                                                         Very
Overall                (395)      4.50                                                              know                  poor                                                                                                         good


* Significantly different at 5% level.                                                                  SEPs                     FEPs                 SOEPs                   Fund managers                      ( ): % of all respondents
( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)



Q5.12(1) The Exchange is … .. to changing market needs in developing the stock market.
                                                                                                    (4%)               (1%)              (5%)                (12%)                 (30%)           (40%)               (7%)           (1%)
                                 Mean                                              100%

                                 score                                                 90%
                                             % of respondents by type




                                                                                       80%
SEPs                   (256)      4.31                                                 70%
                                         *                                                                                                                                                                 62%
 Large SEPs             (24)      4.83                                                 60%
                                         *                                             50%
 Small SEPs            (232)      4.25                                                                                                                                                           39%
                                                                                       40%
Fund Managers           (13)      4.54                                                 30%
                                                                                                                                                                              30%

                                                                                       20%                                                                                                 15%
Overall                (269)      4.32                                                 10%
                                                                                                                                        5% 8%              12% 8%                                                  7% 8%
                                                                                               4%                   1%                                                                                                               1% 0%
                                                                                                            0%                   0%
* Significantly different at 1% level.                                                  0%
( ) No. of respondents giving a rating                                                                  0                 1                   2                   3                    4               5                6                 7
    (i.e. excluding “Don’t know”)                                                              Don't                   Very                                                                                                            Very
                                                                                               know                unresponsive                                                                                                     responsive


                                                                                                                   SEPs                                       Fund managers                                      ( ): % of all respondents



                                                                                                        - 33 -                                                                   Research & Planning, HKEx
                                                                                                                                                                                               12 May 2005
        Secondary Market Survey 2004

Q5.12(2) FEP:     The Exchange is … .. to changing market needs in developing the derivatives
                  market (excluding stock options).
            SOEP: The Exchange is … .. to changing market needs in developing the stock options
                  market.
            FM:   The Exchange is … .. to changing market needs in developing the derivatives
                  market.
                                                                                                             (3%)          (0%)        (8%)             (14%)          (29%)         (35%)         (10%)         (2%)
                                 Mean                                                          100%

                                 score                                                         90%




                                                                    % of respondents by type
                                                                                               80%
FEPs                     (89)     4.37                                                         70%
 Large FEPs              (20)     4.35                                                         60%

 Small FEPs              (69)     4.38                                                         50%
                                                                                                                                                                                   39%
                                                                                               40%
SOEPs                    (31)     4.26                                                                           30%                                                31% 30%              31%
                                                                                               30%                                                                     22%
Fund Managers             (7)     3.86                                                         20%
                                                                                                                                               20%      19%                                        16%
                                                                                                                                           9%        13%                                     10% 8% 10%
                                                                                               10%          3%                        6%
Overall                (127)      4.31                                                                 0%              0% 0% 0%                               0%                                            2% 0% 0%
                                                                                                0%
( ) No. of respondents giving a rating                                                                       0                1            2             3               4               5          6            7
                                                                                                        Don't              Very                                                                                 Very
    (i.e. excluding “Don’t know”)                                                                                      unresponsive                                                                          responsive
                                                                                                        know


                                                                                                                 FEPs                  SOEPs                       Fund managers               ( ): % of all respondents




Q5.10       The priority the Exchange gives to the public interest is … ..
                                                                                                        (6%)            (0%)          (4%)            (7%)            (27%)          (33%)          (19%)            (3%)
                                                                             100%
                                 Mean
                                                                                         90%
                                 score
                                         % of respondents by type




                                                                                         80%
SEPs                   (250)      4.63                                                   70%
 Large SEPs             (24)      4.96                                                   60%

 Small SEPs            (226)      4.60                                                   50%
                                                                                         40%                                                                                 33% 38%
FEPs                    (87)      4.92                                                                                                                             27% 28%
                                                                                                                                                                          31% 31%
                                                                                                                                                                                          27%
                                                                                                                                                                                              31%
                                                                                         30%
 Large FEPs             (20)      4.90                                                                                                                                25%            23%
                                                                                                                                                                                       16%  19%
                                                                                         20%
 Small FEPs             (67)      4.93                                                   10%
                                                                                                      7% 9% 8%         4% 3%
                                                                                                                                                8%
                                                                                                                                                     8%6%                                                        6%
                                                                                                               0% 0%     3%                                                                                 3%          0%
SOEPs                   (29)      4.72                                                         0%
                                                                                                        2%       0% 0%
                                                                                                                                                         3% 0%
                                                                                                                                                                                                                      0%

Fund Managers           (12)      4.75                                                                   0                1                2             3              4                5           6            7
                                                                                                       Don't             Very                                                                                    Very
Overall                (378)      4.71                                                                 know              low                                                                                     high


( ) No. of respondents giving a rating                                                                   SEPs                 FEPs              SOEPs               Fund managers              ( ): % of all respondents
    (i.e. excluding “Don’t 7know”)




                                                                                                            - 34 -                                                    Research & Planning, HKEx
                                                                                                                                                                                    12 May 2005
        Secondary Market Survey 2004

9.      OTHER MARKET SERVICES

9.1     Broker services

Q6.1(1) In general, the quality of service of stock brokers is … ..
                                                                                                              (2%)       (0%)      (0%)           (2%)             (20%)        (44%)        (29%)            (3%)
                                 Mean                                                          100%
                                 score                                                         90%




                                                                    % of respondents by type
                                                                                               80%
SEPs                   (263)      5.11                                                         70%
                                                                                                                                                                                      54%
 Large SEPs             (23)      4.96                                                         60%
                                                                                               50%
 Small SEPs            (240)      5.13                                                                                                                                          43%                38%
                                                                                               40%
Fund Managers           (13)      5.23                                                         30%
                                                                                                                                                                                             28%
                                                                                                                                                                  21%
                                                                                               20%
Overall                (276)      5.12                                                                                                                     8%
                                                                                               10%
                                                                                                          2% 0%         0% 0%                     1%                                                          3% 0%
                                                                                                                                  0% 0%                                   0%
( ) No. of respondents giving a rating                                                          0%
    (i.e. excluding “Don’t know”)                                                                              0             1          2              3              4           5             6               7
                                                                                                          Don't          Very                                                                                 Very
                                                                                                          know           poor                                                                                 good


                                                                                                                       SEPs                         Fund managers                           ( ): % of all respondents




Q6.1(2) FEP:  In general, the quality of service of futures brokers is … ..
        SOEP: In general, the quality of service of stock options brokers is … ..
        FM:   In general, the quality of service of futures brokers is … ..
                                                                                                          (7%)          (0%)       (2%)           (5%)              (21%)        (38%)          (25%)               (3%)
                                 Mean                                        100%

                                 score                                                   90%
                                         % of respondents by type




                                                                                         80%
FEPs                     (88)     5.01                                                   70%

 Large FEPs              (18)     5.11                                                   60%
                                                                                         50%
 Small FEPs              (70)     4.99                                                                        36%                                                               38% 41%
                                                                                         40%
SOEPs                    (29)     4.66                                                   30%
                                                                                                                                                                                          27% 29%       27%
                                                                                                                                                                 22% 22%
Fund Managers             (7)     5.29                                                   20%                                                                                                    13%
                                                                                                          9%                                     4% 9%                     9%
                                                                                         10%                                                                                                                  3%
Overall                (124)      4.94                                                         0%
                                                                                                     2%               0% 0% 0%   1% 3%
                                                                                                                                            0%
                                                                                                                                                           0%                                                       3% 0%

                                                                                                          0              1          2               3                 4               5             6                7
( ) No. of respondents giving a rating
                                                                                                      Don't             Very                                                                                       Very
    (i.e. excluding “Don’t know”)                                                                     know              poor                                                                                       good


                                                                                                               FEPs               SOEPs                         Fund managers                ( ): % of all respondents




                                                                                                           - 35 -                                                  Research & Planning, HKEx
                                                                                                                                                                                 12 May 2005
        Secondary Market Survey 2004

9.2     Other intermediaries’services

Q6.2 In general, the quality of service of information vendors is … ..
                                                                                                              (5%)               (0%)             (2%)               (5%)            (23%)              (43%)             (21%)            (2%)
                                 Mean                                       100%

                                 score                                                 90%




                                                 % of respondents by type
                                                                                       80%
                                         ^
SEPs                   (255)      4.94                                                 70%
 Large SEPs             (24)      5.08                                                 60%
                                                                                                                                                                                                                50%
 Small SEPs            (231)      4.93                                                 50%
                                                                                                                                                                                                   45%
                                         ^                                                                                                                                                               39%
FEPs                    (85)      4.78                                                 40%
                                                                                                                                                                                                          31%
                                                                                                                                                                              25%                                      21% 25%
 Large FEPs             (17)      4.76                                                 30%
                                                                                                                                                                        22% 24%    17%                               21% 16%
                                                                                       20%                                                                                       16%
 Small FEPs             (68)      4.78                                                                             9%
                                                                                                                                        6%    7%                                                                                                  8%
                                         ^                                             10% 4%4%
SOEPs                   (29)      4.31                                                  0%
                                                                                                                        0% 0%0%0%0% 1%2% 0% 3%
                                                                                                                                                                                0%
                                                                                                                                                                                                                                      3%
                                                                                                                                                                                                                                           1%
                                                                                                                                                                                                                                             0%
                                         ^
Fund Managers           (12)      5.25                                                                          0                  1                2                   3                 4               5                 6               7
                                                                                                              Don't               Very                                                                                                     Very
Overall                (381)      4.87                                                                        know                poor                                                                                                     good

^ Significantly different at 1% level.                                                                          SEPs                   FEPs                 SOEPs                    Fund managers                   ( ): % of all respondents
( ) No. of respondents giving a rating
    (i.e. excluding “Don’t know”)



Q6.3 In general, the quality of service of custodians is … ..
                                                                                                                (8%)              (0%)             (0%)                (3%)              (22%)            (39%)            (24%)            (3%)
                                 Mean                                        100%
                                                                                         90%
                                 score
                                             % of respondents by type




                                                                                         80%
SEPs                   (242)      5.01                                                   70%

 Large SEPs             (23)      5.09                                                   60%
                                                                                         50%
 Small SEPs            (219)      5.00                                                                                                                                                                   39%
                                                                                         40%                                                                                                                                        33%
                                                                                                                                                                                                                    33%
Fund Managers           (12)      5.08                                                   30%
                                                                                                                                                                                         23%                              23%
                                                                                                                                                                             17%
                                                                                         20%
Overall                (254)      5.02                                                   10%
                                                                                                              9%                                                                                  8%                                                8%
                                                                                                                       0%        0% 0%             0% 0%              2%                                                                   3%
( ) No. of respondents giving a rating                                                             0%
    (i.e. excluding “Don’t know”)                                                                                  0                1                   2                   3                 4               5                 6               7
                                                                                                              Don't               Very                                                                                                      Very
                                                                                                              know                poor                                                                                                      good


                                                                                                                             SEPs                                           Fund managers                                 ( ): % of all respondents




Q6.4 In general, the quality of service of share registrars is … ..
                                                                                                                    (3%)            (1%)            (1%)               (4%)              (23%)            (41%)            (22%)            (4%)
                                 Mean                                                                  100%

                                 score                                                                 90%
                                                                            % of respondents by type




                                                                                                       80%
SEPs                   (259)      4.89                                                                 70%
 Large SEPs             (24)      5.08                                                                 60%
                                                                                                                                                                                                                    50%
                                                                                                       50%
 Small SEPs            (235)      4.87                                                                                                                                                                    41%
                                                                                                       40%
Fund Managers           (12)      5.33                                                                 30%
                                                                                                                                                                                         23%                               22% 17%
                                                                                                                                                                                                  17%                                             17%
                                                                                                       20%
Overall                (271)      4.91                                                                 10%
                                                                                                                                                                        4%
                                                                                                                   3%               1%              1%                                                                                     3%
                                                                                                                            0%               0%                 0%                  0%
( ) No. of respondents giving a rating                                                                  0%
    (i.e. excluding “Don’t know”)                                                                                       0                1                  2                   3              4                5               6               7
                                                                                                                    Don't              Very                                                                                                 Very
                                                                                                                    know               poor                                                                                                 good


                                                                                                                                  SEPs                                       Fund managers                                ( ): % of all respondents




                                                                                                                       - 36 -                                                             Research & Planning, HKEx
                                                                                                                                                                                                        12 May 2005
        Secondary Market Survey 2004

Q6.5 In general, the quality of service of investment advisers is … ..
                                                                                             (15%)               (1%)        (2%)         (10%)         (32%)         (30%)          (10%)         (1%)
                                 Mean                                               100%
                                 score                                              90%




                                                         % of respondents by type
                                                                                    80%
SEPs                   (225)      4.47                                              70%
 Large SEPs             (20)      4.65                                              60%
 Small SEPs            (205)      4.45                                              50%
                                                                                                                                                         34%
FEPs                    (79)      4.37                                              40%
                                                                                                                                                       33%        30%   33%
                                                                                                 25%                                                           25% 30%
 Large FEPs             (15)      4.67                                              30%
                                                                                                                                               19%           22%      25%
                                                                                    20% 16%                                                                                             17%
 Small FEPs             (64)      4.30                                                      11%        8%                    3%3%       8%
                                                                                                                                             11%
                                                                                                                                                  8%                                10%
                                                                                                                                                                                 10% 6%              8%
                                                                                    10%
SOEPs                   (24)      4.17                                               0%
                                                                                                            1%    0%0% 1%
                                                                                                                 0%                  0%
                                                                                                                                                                                              1% 0%
                                                                                                                                                                                                   0%
Fund Managers           (11)      4.91                                                           0                   1           2               3        4             5              6            7
                                                                                             Don't               Very                                                                              Very
Overall                (339)      4.44                                                       know                poor                                                                              good

( ) No. of respondents giving a rating                                                        SEPs                   FEPs            SOEPs           Fund managers               ( ): % of all respondents
    (i.e. excluding “Don’t know”)


Q6.6 SEP:     In general, the quality of service of vendors (in relation to vendor-supplied stock
              trading systems) is … ..
        FEP:  In general, the quality of service of vendors (in relation to vendor-supplied
              derivatives (excluding stock options) trading systems) is … ..
        SOEP: In general, the quality of service of vendors (in relation to vendor-supplied stock
              options trading systems) is … ..
                                                                                           (12%)             (1%)           (1%)          (7%)         (30%)         (33%)          (13%)          (2%)
                                 Mean                                      100%
                                 score                                              90%
                                         % of respondents by type




                                                                                    80%
SEPs                   (236)      4.64                                              70%
 Large SEPs             (20)      4.65                                              60%
                                                                                    50%
 Small SEPs            (216)      4.64                                                                                                                 31%   37%
                                                                                    40%
                                                                                                                                                     30% 28%
FEPs                    (79)      4.56                                              30%
                                                                                                                                                                26%
                                                                                        12%   19%                   11%                                                        19% 15% 19%
 Large FEPs             (16)      4.63                                              20%
                                                                                           11%                         9%                                                         12%
                                                                                                               6% 6%                                                                               3%
 Small FEPs             (63)      4.54                                              10%
                                                                                                 1% 0% 0% 0%2%                                                                                2%     0%
                                                                                     0%
SOEPs                   (26)      4.42                                                       0                   1           2               3           4             5              6            7
                                                                                           Don't             Very                                                                                Very
Overall                (341)      4.60                                                     know              poor                                                                                good
( ) No. of respondents giving a rating
                                                                                                      SEPs                       FEPs                    SOEPs                    ( ): % of all respondents
    (i.e. excluding “Don’t know”)


Q6.7        The quality of analyst research on the Hong Kong stock market is … ..
                                                                                                 (0%)            (0%)        (8%)            (8%)       (23%)         (46%)          (15%)          (0%)
                                                                                    100%
                                 Mean
                                                                                     90%
                                                   % of respondents by type




                                 score                                               80%

Fund Managers            (13)     4.54                                               70%
                                                                                     60%
Overall                  (13)     4.54                                               50%                                                                               46%

                                                                                     40%
( ) No. of respondents giving a rating
                                                                                     30%
    (i.e. excluding “Don’t know”)                                                                                                                        23%
                                                                                     20%                                                                                              15%
                                                                                                                              8%              8%
                                                                                     10%
                                                                                                 0%                  0%                                                                            0%
                                                                                     0%
                                                                                                 0                   1           2               3           4             5              6            7
                                                                                             Don't            Very                                                                                 Very
                                                                                             know             poor                                                                                 good

                                                                                                                                 Fund Managers                                     ( ): % of all respondents


                                                                                                   - 37 -                                                Research & Planning, HKEx
                                                                                                                                                                       12 May 2005
        Secondary Market Survey 2004

10.     MAINLAND CHINA DIMENSION

        “Mainland companies” refers to H shares, Red Chips and non-H share Mainland
        privately-owned enterprises listed on the Exchange.

Q7.1     The regulation of Mainland companies listed in Hong Kong is … ..
                                                                                                             (7%)               (4%)              (11%)          (18%)            (32%)           (23%)         (6%)          (1%)
                                 Mean                                          100%
                                                                                           90%
                                 score



                                         % of respondents by type
                                                                                           80%
SEPs                   (252)      3.86                                                     70%
                                                                                           60%
 Large SEPs             (24)      4.21
                                                                                           50%
 Small SEPs            (228)      3.82                                                     40%
                                                                                                                                                                                       38%
                                                                                                                                                                                                       31%
Fund Managers           (11)      4.00                                                     30%
                                                                                                                                                                                 32%
                                                                                                                                                                 19%                             22%
                                                                                           20%                      15%                                 15%
Overall                (263)      3.87                                                     10%             6%                  4%
                                                                                                                                                  10%
                                                                                                                                                                                                              6%
                                                                                                                                        0%                              0%                                              0%   1%       0%
                                                                                                    0%
( ) No. of respondents giving a rating
                                                                                                                0                   1               2               3              4               5               6              7
    (i.e. excluding “Don’t know”)                                                                          Don't             Very                                                                                              Very
                                                                                                           know           ineffective                                                                                        effective


                                                                                                                           SEPs                                    Fund managers                             ( ): % of all respondents



Q7.2     The corporate governance of Mainland companies listed in Hong Kong is … ..
                                                                                                                    (6%)            (5%)            (12%)          (23%)           (34%)           (15%)         (4%)          (1%)
                                 Mean                                                               100%
                                 score                                                               90%
                                                                         % of respondents by type




                                                                                                     80%
SEPs                   (254)      3.64                                                               70%
 Large SEPs             (24)      3.96                                                               60%
                                                                                                     50%
 Small SEPs            (230)      3.60                                                                                                                                            35%
                                                                                                     40%
Fund Managers           (11)      3.36                                                               30%
                                                                                                                                                                           31%
                                                                                                                                                                 23%                       23%
                                                                                                     20%                 15%                                                                     15% 15%
Overall                (265)      3.63                                                               10%     6%                  5% 8%             12% 8%                                                      4%

                                                                                                                                                                                                                        0%   1% 0%
( ) No. of respondents giving a rating                                                                0%
    (i.e. excluding “Don’t know”)                                                                                    0                  1               2               3              4               5            6             7
                                                                                                                Don't               Very                                                                                      Very
                                                                                                                know                poor                                                                                      good


                                                                                                                                SEPs                                    Fund managers                        ( ): % of all respondents



Q7.3     The content of information disclosure by Mainland companies listed in Hong Kong is … ..
                                                                                                            (5%)               (4%)               (13%)          (29%)            (30%)           (13%)        (4%)          (1%)
                                 Mean                                                               100%

                                 score                                                              90%
                                                             % of respondents by type




                                                                                                    80%
SEPs                   (256)      3.54                                                              70%
 Large SEPs             (25)      3.76                                                              60%
                                                                                                    50%
 Small SEPs            (231)      3.51
                                                                                                    40%
Fund Managers           (12)      3.58                                                              30%
                                                                                                                                                                 30%             30% 31%
                                                                                                                                                                           23%
                                                                                                                                            15%   14%                                                  15%
                                                                                                    20%
Overall                (268)      3.54                                                              10%     5% 8%
                                                                                                                                                                                                 13%                   8%
                                                                                                                                4%                          0%                                                4%             1% 0%
( ) No. of respondents giving a rating                                                               0%

    (i.e. excluding “Don’t know”)                                                                                   0                   1               2              3               4            5              6            7
                                                                                                             Don't                Very                                                                                       Very
                                                                                                             know                 poor                                                                                       good


                                                                                                                               SEPs                                 Fund managers                            ( ): % of all respondents




                                                                                                                    - 38 -                                                        Research & Planning, HKEx
                                                                                                                                                                                                12 May 2005
        Secondary Market Survey 2004

Q7.4 The timeliness of information disclosure by Mainland companies listed in Hong Kong
     is … ..
                                                                                                    (5%)            (5%)               (14%)           (29%)           (27%)            (16%)                  (3%)         (1%)
                                                                                  100%
                                 Mean                                                   90%




                                             % of respondents by type
                                 score                                                  80%
                                                                                        70%
SEPs                   (254)      3.53                                                  60%
 Large SEPs             (25)      3.80                                                  50%

 Small SEPs            (229)      3.50                                                  40%
                                                                                                                                                                     28%
                                                                                        30%
Fund Managers           (12)      3.42                                                                                                      15%
                                                                                                                                                            23%             23%
                                                                                                                                                                                     15%
                                                                                                                                                                                               23%
                                                                                        20%
                                                                                                                                     13%          10%
                                                                                        10%    5% 8%                        8%
Overall                (266)      3.53                                                                             4%                                                                                  3% 0%               1% 0%
                                                                                        0%
( ) No. of respondents giving a rating                                                              0                   1               2               3               4                  5                   6                7
    (i.e. excluding “Don’t know”)                                                              Don't                Very                                                                                                    Very
                                                                                               know                 poor                                                                                                    good


                                                                                                                 SEPs                                  Fund managers                                  ( ): % of all respondents



11.     DEVELOPMENT PROSPECTS

Q8.1(1) The development prospects in the China dimension for the Hong Kong stock
        market are … ..
                                                                                                        (4%)            (0%)               (1%)         (6%)            (16%)              (36%)               (29%)            (7%)
                                                                                        100%
                                 Mean                                                    90%
                                                          % of respondents by type




                                 score                                                   80%
                                         ^                                               70%
SEPs                   (257)      5.08                                                                                                                                                                             54%
                                                                                         60%
 Large SEPs             (24)      5.13                                                   50%
 Small SEPs            (233)      5.07                                                   40%                                                                                          37%
                                         ^                                                                                                                                                             28%
Fund Managers           (12)      5.83                                                   30%
                                                                                         20%                                                                          16%                      15%                                  15%
Overall                (269)      5.11                                                   10%
                                                                                                4%
                                                                                                            8%
                                                                                                                    0% 0%
                                                                                                                                                   6%                          8%                                          7%
                                                                                                                                      1% 0%                    0%
                                                                                         0%
^ Significantly different at 5% level.                                                                  0                   1               2              3               4               5                   6                7
( ) No. of respondents giving a rating                                                          Don't                 Very                                                                                                  Very
    (i.e. excluding “Don’t know”)                                                               know                  poor                                                                                                  good


                                                                                                                   SEPs                                 Fund managers                                 ( ): % of all respondents


Q8.1(2) FEP:      The development prospects in the China dimension for the HK derivatives
                  market (excluding stock options) are … ..
            SOEP: The development prospects in the China dimension for the HK stock options
                  market are … ..
            FM:   The development prospects in the China dimension for the HK derivatives
                  market are … ..
                                                                                                    (9%)            (2%)              (6%)         (3%)              (19%)           (35%)            (22%)                (5%)
                                                                                        100%
                                 Mean
                                                                                        90%
                                 Score
                                                             % of respondents by type




                                                                                        80%

FEPs                     (86)     4.92                                                  70%
                                         #                                              60%
 Large FEPs              (18)     5.67
                                         #                                              50%
 Small FEPs              (68)     4.72                                                  40%
                                                                                                                                                                                    37%
                                                                                                                                                                                       31%
SOEPs                    (27)     4.48                                                  30%
                                                                                                        27%                                                                               27%        26%       27%
                                                                                                                                                                    21% 16%
Fund Managers             (8)     4.88                                                  20%     16%
                                                                                                                                             9%                             9%                          9%                 9%
                                                                                        10%    4%                     6%             6% 6%             6%
                                                                                                                 0%             0%                2%        0%                                                        4%        0%
Overall                (121)      4.82                                                   0%
                                                                                                    0                   1               2              3               4               5                   6                7
#
  Significantly different at 1% level.                                                         Don't                Very                                                                                                   Very
( ) No. of respondents giving a rating                                                         know                 poor                                                                                                   good
    (i.e. excluding “Don’t know”)
                                                                                                            FEPs                      SOEPs                      Fund managers                   ( ): % of all respondents


                                                                                                        - 39 -                                                         Research & Planning, HKEx
                                                                                                                                                                                     12 May 2005
        Secondary Market Survey 2004

Q8.2(1) The business potential offered to your firm by the Hong Kong stock market is … ..
                                                                                              (1%)          (1%)       (3%)         (10%)           (31%)         (32%)           (16%)           (5%)
                                   Mean                                              100%
                                                                                     90%
                                   score




                                               % of respondents by type
                                                                                     80%
                                           ^
SEPs                    (265)      4.55                                              70%
                                                                                                                                                                                          62%
                                           *                                         60%
 Large SEPs              (25)      5.08
                                           *                                         50%
 Small SEPs             (240)      4.49                                              40%
                                           ^
Fund Managers            (13)      5.85                                              30%
                                                                                                                                                   32%           33%

                                                                                                                                                                        15%      14%                 15%
                                                                                     20%
Overall                 (278)      4.61                                              10%
                                                                                                                                    11%                    8%                                   4%
                                                                                            1% 0%           1% 0%      3% 0%               0%
^ Significantly different at 0.1% level.                                              0%

* Significantly different at 5% level.                                                         0                1           2          3              4             5                 6              7
                                                                                             Don't          Very                                                                                 Very
( ) No. of respondents giving a rating                                                                                                                                                           high
                                                                                             know           low
    (i.e. excluding “Don’t know”)
                                                                                                         SEPs                         Fund managers                             ( ): % of all respondents




Q8.2(2) FEP:      The business potential offered to your firm by the Hong Kong derivatives
                  market (excluding stock options) is … ..
            SOEP: The business potential offered to your firm by the Hong Kong stock options
                  market is … ..
            FM:   The business potential offered to your firm by the Hong Kong derivatives
                  market is … ..
                                                                                             (4%)           (1%)       (5%)         (8%)           (24%)         (32%)            (21%)          (6%)
                                   Mean                                              100%
                                   score                                              90%
                                                          % of respondents by type




                                                                                      80%
FEPs                      (90)     4.83
                                           #                                          70%
 Large FEPs               (20)     5.60                                               60%
                                           #
 Small FEPs               (70)     4.61                                               50%
                                                                                                   36%                                                              34%                   36%
SOEPs                     (31)     4.35                                               40%
                                                                                                                                                  27%            33%
                                                                                                                                                     25%
Fund Managers              (7)     5.43                                               30%                                                                                       23%
                                                                                      20%
                                                                                                                            9% 9%   9% 9%                                  9%       9%                   9%
Overall                 (128)      4.75                                               10%
                                                                                            0% 3%
                                                                                                               3%
                                                                                                                                                                                                6% 6%
                                                                                                          0%        0% 2%                   0%             0%
                                                                                       0%
#
  Significantly different at 0.1% level.                                                       0                1           2          3               4               5              6              7
( ) No. of respondents giving a rating                                                       Don't           Very                                                                                 Very
                                                                                             know            low                                                                                  high
    (i.e. excluding “Don’t know”)
                                                                                                     FEPs               SOEPs                    Fund managers                  ( ): % of all respondents




                                                                                            ∗∗∗ END ∗∗∗




                                                                                               - 40 -                                               Research & Planning, HKEx
                                                                                                                                                                  12 May 2005

								
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