A COMPARATIVE STUDY OF THE HONG KONG AND SINGAPORE STOCK MARKETS

Abstract

A stock market is an institution that transforms savings into real capital formation by providing funds for companies to finance their expansion plans. It facilitates the trading of stocks by bringing together the individual buyers and sellers. Its performance is a major source of information on the cost and availability of capital funds. A market that functions well can spur the growth of enterprises as it can provide a large number of entrepreneurs access to funds. For countries such as Hongkong and Singapore where financial services are important sources of income, the performance of the stock markets can affect the national economy to a certain extent. This academic exercise is a study of the respective stock markets with emphasis on the differences between the markets. This will be done by first highlighting the different ideologies of Hongkong and Singapore. A review of the history and development of the two countries' stock markets will then be given. Following that the performance of the two markets will be compared over a ten-year period. Through this comparison, the salient features of each market will be brought into focus. Financial crisis test the resilience of a stock market as such the ongoing Asian financial crisis in the midst of the preparation of this thesis will be discussed through its effects on the Hongkong and Singapore stock markets. Finally, at the close of this dissertation, the future outlook of each of this markets will be deliberated upon.