HKEX mulls lowering minimum buying threshold for most expensive stocks

The Hong Kong Stock Exchange and Clearing (0388) was reported to be discussing options to lower the minimum purchase requirements for some of the most expensive stocks as it aims to stimulate trading activity.

HKEX has proposed simplifying the minimum trading unit for each stock during recent discussions with brokers, according to Bloomberg, citing sources.

Each Hong Kong-listed company sets its own minimum trading unit, ranging from 100 shares to several thousand. By comparison, markets -- including mainland China -- generally require a minimum of 100 shares, with some permitting trades with as few as a single share. 

For example, purchasing BYD (1211) in Hong Kong requires a minimum of 500 shares, which at yesterday’s closing price of HK$355.00 per share would cost an investor HK$177,500.

Financial Secretary Paul Chan Mo-po announced in the latest budget that HKEX and the city's equity regulator will propose changes to the trading unit system later this year to improve liquidity and trading efficiency for stocks of varying sizes.

STAFF REPORTER