I feel that whilst completing this assignment, it would probably be easier for me to simply have surgery to attach my accounting dictionary to my hand because it has been so crucial to me surviving this course so far. From reading the annual reports, deciphering interviews with stock exchange moguls, "reading" financial statements and so on, I have come to realise that my knowledge of accounting lingo left a lot to be desired. But because of this challenge, it has forced to me expand my knowledge of accounting terms and I feel that now when I’m reading through text about Hong Kong Exchange, I can actually understand them.

 <--- How I feel reading HKEx reports!

I’ve been trying to expand my understanding of the achievements that HKEx had during 2014, as it seems like it was quite a pivotal year for them. I have read through the HKEx Annual Report 2014

 several times now and have pinpointed several reasons as to why they were so successful this year with their achievements.

The global financial environment in 2014 continued to be a very challenging one, however HKEx still managed to make a profit with their markets still performing well. The best example of this is with their IPO (Initial Product Offering) performance that was ranked 2nd in the world and showed an increase of 38% from 2013 for the company. This gave them $232.5 billion of equity funds, which was largely due to the 122 companies, which were newly listed on their market.

In comparison to this, the ADT (Average Daily Turnover) for the secondary market grew by only 11% from 2013, which was initially surprising considering their implementation of the Shanghai-Hong Kong Stock Connect. It did only start in November, but I think because it was so widely spoken about for so many months, years even, that I expected the results to blow them out of the water for 2014. This 11% increase is a positive sign for the future, considering the ADT for the whole year was $69.5 billion which was already an increase, it’s very exciting to see that once the Stock Connect was fully active, the third and fourth quarters of the year showed ADT of $70.9 and $80.7 billion respectively. Hopefully we will see these results continue into the new financial year for HKEx.

In conjunction with the results of the Stock Connect, we also saw many other initiatives taken by the company that contributed to their positive results.

These are just a few of them:

·     Launched market data exchange programme with SSE 
(Shanghai Stock Exchange)

·     Introduced market data promotion programmes to support Southbound Trading 


·     Launched MMDH (Mainland Market Data Hub
) in Shanghai 


·     Introduced 10 new stock option classes 


·     Expanded Primary Market Maker programme to a total of 17 stock option classes 


·     Strengthened cooperation with professional associations in Hong Kong through LME training and 
briefings on new commodities products 


These are some examples of achievements that HKEx had in 2014 that cover all areas of the company including the cash, equity, derivatives and commodities segments.

Although HKEx didn’t show a spectacular profit in 2014, they have put in the foundations for some very successful years to come if all goes to plan!!

There is no rest for the wicked... or the people studying accounting!

So I spent some time this morning trying to get a better grasp on the fundamentals of my company and what is leading to their increased growth each year, when I stumbled upon this gem.

This is a short video that explains in simpler terms what the Hong Kong-Shanghai Stock Connect is and what impact it will have upon HKEx.
I found this to be very helpful because it detailed how this "connection" will help to internationalise their RMB which is one of their goals throughout their annual reports, company visions and goals.
FINALLY, I'm getting a grasp on the company and putting all the pieces together!

#SuccessfulSundays

Where do I start when it comes to Hong Kong Exchange?!

But really, where do I start???

I’ve spent about 10 hours so far this week simply trying to understand the annual reports and the statements that are included, whilst not having the greatest understanding of the actual company. 

So I have decided that I am going to stop where I am with my assignment and start with the basics -

What is HKEx?

Hong Kong Exchanges is a company that operates a securities and derivatives market and the clearinghouses for them both. They are based in Hong Kong and began trading in 2000, this year marking its 15th Anniversary. The celebration of this anniversary seemed to be a huge affair from what they have posted on their website which shows great improvement within the company and so many tremendous accomplishments, foremost, they are now one of the world’s largest exchange owners based on the market capitalization of their shares. In their 15th Anniversary announcements they showed that their closing price of dividends to share holders had escalated dramatically from $8.25 in 2000 sky high to $309.40 in 2015. 

It also shows that they have diversified their company over the 15 years, primarily through their take over of the London Metal Exchange (LME) in 2012 which already accounts for 16% of their Revenue, which in a multibillion dollar company is quite a lot.

Their website seems very forthcoming with all information displayed clearly which was surprising to me considering they are a Chinese company. However, considering they are a multi billion-dollar company, I shouldn't have really been that surprised. 

I’ve started to read through their annual report for 2014 and you can see how well they are operating their business; almost all of the key aspects of the company have shown very similar growth. This is both for income and expenses and such. It’s my view that these both go hand in hand and so their report looks positive in my eyes so far.

The overall growth in revenue and income is attributed to higher trading volumes and growth in their other categories. Whilst the growth in operating expenses was in direct relation to the former with the higher trading volumes requiring a higher head count, along with increased legal fees.

If I were investing in their company, my main focus would be on what I can get from the company overall and with a 12% increase in basic earnings per share and a whopping 25% increase in dividends per share, I would be more than happy to see these results.

One of their biggest strategic achievements for the year was the launch of their Shanghai-Hong Kong Stock Connect program, which involves investors in both Mainland China and Hong Kong to be able to access each other’s equity markets. This scheme will also hopefully help the never-ending process of making the Remnibi (Chinese currency) internationalized and allow the company to continue expanding.

The biggest question I have continuously popping up in my head is “What does the internationalization of a currency really mean?” Although this question doesn’t really have much impact on the financial statements, I feel as though it will greatly help my understanding of the company if I can figure it out. So this is my mission over the next couple of weeks, hopefully with some help by my fellow accounting students.

Overall, I find the company to be very confusing because of the technical language they use because I’m unfamiliar with it, but the numbers don’t lie and the company appears to be flourishing.

I feel as though the picture below really is the perfect example of how this company is trending in what I’ve seen and read so far.

My Company

Yesterday afternoon after about 5 hours of constantly refreshing my CQU Moodle page for this course, the "Find your Company" page finally went up and I discovered that I will researching a company from China called Hong Kong Exchanges (HKEx).

Ive been doing some brief research into them so far and my head is swimming and I feel a little like I'm drowning while I attempt to understand all of the jargon in the financial reports.
Dictionary of Accounting please save me!!

But I have managed to find this interesting little video on the history of the company which is definitely helpful to me trying to wrap my head around it all.

Now I'm going to continue throwing myself into financial reports and hope that something starts to make sense soon.

Feel free to share how you all are going and send me links to your own page!

I have completed my first SPA for this course. HOORAY!!

Not sure if my other two subjects are just incredibly boring in comparison but I really enjoyed this assessment. Ive found that reading the text does nothing in my brain because I'm a visual learner and need some sort of pictures or video or something. So being able to create mini exam questions for each other on Peerwise has been great and being able to talk about my own personal opinions and view points on Chapter 6 has really helped me absorb what I'm learning. If only all my subjects were this enjoyable.

This whole experience so far, and we are only in week 1, has made me realise I need more pictures and diagrams and personal examples in the notes that I take so hopefully I'll retain my other subjects just as well as this one.
How is everyone else going so far?

Please enjoy the cat memes and Goodluck to everyone with getting started!!