FINANCIAL AND MONETARY AFFAIRS
outside Hong Kong further contribute to the development of financial markets in Hong Kong. To further enhance its human resources, an Advisory Committee on Human Resources Development in the Financial Services Sector was established on June 1. It is an ongoing mechanism to encourage better communication among all relevant organisations and individuals and to match the demand for and supply of human resources development programmes in the financial services sector in pursuit of the longer term benefits of the sector.
Hong Kong has a very strong presence of international financial institutions. At the end of 2000, there were 138 foreign-owned banks. Of the world's top 100 banks, 79 had operations in Hong Kong, while 76 subsidiaries or related companies of foreign banks operated as restricted licence banks and deposit-taking companies. A further 118 foreign banks had local representative offices.
The interbank money market is well established. Wholesale deposits are traded actively among local authorised institutions, and between local and overseas institutions, with an average daily turnover of $192.6 billion in 2000. The interbank money market is mainly for short-term money, with maturities ranging mostly from overnight to 12 months, for both Hong Kong dollars and foreign currencies.
The traditional lenders of Hong Kong dollars are mostly the locally incorporated banks. The major borrowers are foreign banks without a strong Hong Kong dollar deposit base. At the end of December, the Hong Kong interbank money market accounted for 12 per cent of the gross Hong Kong dollar liabilities of the banking
sector.
Hong Kong also has a mature and active foreign exchange market, which forms an integral part of the global market. The link with other overseas centres enables foreign exchange dealing to continue 24 hours a day around the world. The latest triennial survey co-ordinated by the BIS shows the daily average foreign exchange turnover in Hong Kong in April 1998 to be US$78.6 billion, which represents 4 per cent of the world's total transactions and makes Hong Kong the world's seventh largest foreign exchange market.
Hong Kong's derivatives market is among Asia's largest, reflecting the increased sophistication of its financial markets. Currency derivatives contracts (including currency swaps, options and other over-the-counter derivatives) registered an average daily turnover of US$1.4 billion in April 1998, compared with US$0.7 billion in April 1995, according to the BIS. In addition, foreign exchange forward transactions (including outright forwards and foreign exchange swaps) amounted to US$47.6 billion per day in April 1998, or 3.9 per cent of the world total. Interest rate derivatives recorded an average daily turnover of US$2.4 billion in April 1998, compared with US$3.5 billion in April 1995.
With a total market capitalisation of $4,862 billion, the Hong Kong stock market ranked 10th in the world and second in Asia. The average daily turnover in the local stock market increased 59 per cent to $12.3 billion in 2000, compared to $7.8 billion in 1999. The average daily value of stocks sold short was $313 million in 2000, representing a rise of 21 per cent from that of 1999. At the end of the year, 790 public companies were listed on the Stock Exchange of Hong Kong Ltd (SEHK), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx). The 90 (including 47 on the Growth Enterprise Market) newly listed companies raised a total of $132 billion of capital. Besides new share issues, funds were also raised in the
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