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FINANCIAL STRUCTURE
Deposits lodged by dealers other than those members of the Hong Kong Commodity Exchange stood at $400,000. The purpose of the deposits is to give limited protection to investors against any default by dealers who are not members of the Hong Kong Commodity Exchange.
Gold and Silver Exchange
The 68-year-old Chinese Gold and Silver Exchange Society consists of 195 member firms (individuals cannot hold seats). Membership is currently closed.
Trading in gold remained very active during the year in line with the general trend of expansion in the international gold trade. The Hong Kong gold market is now the third largest in the world, after London and Zurich. The usual trading lot is 100 taels consisting of 20 five tael bars, with one tael being equal to 37.4290 grams of 99 per cent pure gold. The time zone position enables the Hong Kong market to trade while Europe is closed down and it completes the global 24-hour trading link between New York, London and Zurich.
On June 22, 1978, the exchange re-opened its silver market which had remained closed since the Pacific War. Each contract in the local market is of 5,000 ounces for New York delivery, priced in Hong Kong dollars. Prices are quoted for every 10 ounces of 99.9 per cent fine silver and a minimum fluctuation of five cents is provided for in the quotes. The trading procedure is the same as that for gold but delivery is based in New York and is handled by the Irving Trust and Co. and the Wing Hang Bank Consortium. With the resumption of silver trading in Hong Kong, a 24-hour global chain of silver trading was established.
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