Financial and Monetary Affairs | 69
listed companies raised $333.9 billion from initial public offerings (IPOs). Hong Kong ranked second worldwide in terms of IPO funds raised, overtaking New York. Besides new share issues, $190.7 billion were raised on the secondary market. The REIT market continued to develop and the aggregate market capitalisation reached $53 billion at year-end.
The Hong Kong stock market is an important fund-raising platform for Mainland enterprises. Of the 143 Mainland-incorporated enterprises listed outside the Mainland, 141 were listed on the SEHK. At year-end, there were 367 Mainland enterprises listed on the SEHK. In 2006, equity funds raised by Mainland enterprises2 amounted to $384.9 billion, which was 73 per cent of the total equity funds raised through the SEHK during the year. About $304.2 billion were raised in new listings of Mainland enterprises in Hong Kong, accounting for 91 per cent of the total equity funds raised in IPOs on the SEHK. The listing of the Industrial and Commercial Bank of China, which was the world's largest IPO, raised $124.9 billion in Hong Kong. The market capitalisation of Mainland enterprises accounted for 50 per cent of the SEHK's total market capitalisation at year-end. In 2006, the total annual trading turnover of Mainland enterprises accounted for 60 per cent of the total annual equity turnover of the Hong Kong stock market. It is expected that Mainland issuers will continue to be major growth drivers of the stock market in the future.
The Hong Kong asset management industry is characterised by its strong international flavour, in terms of the presence of both global fund managers and the different domiciles of authorised funds. According to the Fund Management Activities Survey 2005 conducted by the Securities and Futures Commission (SFC), which covered fund management activities of SFC licensed corporations that engage in asset management and fund advisory businesses and banks which engage in asset management and other private banking activities (collectively referred to 'registered institutions'), the combined fund management business of licensed corporations and registered institutions amounted to $4,526 billion at end-2005, up 25 per cent from $3,618 billion in 2004. SFC licensed corporations accounted for 77 per cent or $3,495 billion of the combined fund management business, and the rest was reported by registered institutions.
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Hong Kong operates one of the most active physical gold markets in the world. Spot gold can be traded through two closely related yet independent markets in the city the Chinese Gold and Silver Exchange Society and the Loco-London gold market. The society, established in 1910, provides trading of both tael bars and kilo bars3. Prices closely follow those in the other major gold markets in London, Zurich and New York.
Hong Kong continues to be one of the most open insurance centres in the world. Among the 181 authorised insurers at year-end, 90 were from 21 overseas
2
Mainland enterprises include H share companies, red-chip companies and non-H share Mainland private enterprises.
Tael bars are of 99 per cent fineness and weighted in taels (one tael equals approximately 1.20337 troy ounces). Kilo bars are of 999.9 parts per thousand fineness and weighted in kilograms.