FINANCIAL AND MONETARY AFFAIRS
80
outstanding contracts US$666 billion. Derivatives on stocks and commodities are less frequently used, with the outstanding amount at US$8 billion.
HKMA became a member of the BIS in November 1996. It offered the membership in recognition of the size of Hong Kong's financial markets and its contribution to the international monetary co-operation. As a member of the BIS, the HKMA will be able to participate more fully in BIS activities and policy discussions. Eight other central banks/monetary authorities were also offered membership of the BIS, including the People's Bank of China. The fact that both the HKMA and the People's Bank of China are invited to join the BIS clearly shows that the international financial community is supportive of the 'one country, two system' concept enshrined in the Joint Declaration and the Basic Law.
The local stock market was on a generally upward trend during 1996. The Hang Seng Index closed at 13 451.45 at the end of 1996, 34.42 per cent above the closing of 10 007.39 at the end of 1995. Average daily turnover in the local stock market was $5.67 billion in 1996, compared with $3.3 billion in 1995.
At the end of the year, 583 public companies were listed on the SEHK. With a total market capitalisation of $3,476 billion, the Hong Kong stock market ranked eighth in the world and second in Asia. The 49 newly-listed companies raised a total of $31.18 billion. Besides new share issues, funds were tapped through rights issues ($4.65 billion) and private placements ($38 billion).
The SEHK launched stock options contracts in respect of HSBC Holdings plc in September 1995. At the end of 1996, options contracts in respect of 11 other stocks had been launched. The futures exchange also traded in three currency futures and three stock futures contracts.
Hang Seng Index Options and Hang Seng Index Futures remained actively traded. Average daily turnover for index options increased from 2 614 contracts in 1995 to 4 393 in 1996. The volume of index futures trading averaged 18 699 contracts a day in 1996, compared with 18 407 contracts a day in 1995.
Hong Kong has an active gold market, in which the main participants are banks, major international bullion houses and gold trading companies. It is commonly known as the Loco-London gold market, with process quoted in US dollars per troy ounce of gold of 99.95 per cent fineness and with delivery in London. Trading in this market has expanded in recent years. The price of Loco-London gold moved between US$365.7 and US$417.7 in 1996. The price of gold fell from US$386.85 per troy ounce at the end of 1995 to US$367.8 per troy ounce at the end of the year.
The Chinese Gold and Silver Exchange Society operates one of the largest gold bullion markets in the world. Gold traded through the society is of 99 per cent fineness, weighted in taels (one tael equals approximately 1.2 troy ounces) and quoted in Hong Kong dollars. Prices closely follow those in the other major gold markets in London, Zurich and New York. The price of gold at the Chinese Gold and Silver Exchange Society exhibited movement similar to that of Loco-London gold. At the end of the year, gold cost $3,409 per tael compared with $3,569 at the end of 1995. Turnover on the exchange totalled 15 million taels in 1996.
The number of authorised unit trusts and mutual funds increased to 1 311 at the year's end, from 1 183 a year earlier.
Page 120Page 121