The Liquidity of Hong Kong Stocks:Statistical Patterns and Implications

　　Statistical analysis in this paper shows that in Hong　Kong,other things given,the larger the company　size,the lower its liquidity ratio,which is defined　as the ratio of annualized transaction value over　market capitalization.Also,other things being equal,the higher the stock price,the lower the liquidity ratio.The size and price variables can explain statistically 30%of the variations in the liquidity ratio.
   In theory,company size and nominal stock price should have little impact on the liquidity ratio.But in reality,some high price blue chips are less frequently transacted in Hong Kong.This could be attributed to overseas trading,large and fixed holding by family shareholders and large board lot sizes.