68 | Financial and Monetary Affairs
The Hong Kong stock market is an important fund-raising platform for Mainland enterprises. At year-end, there were 439 Mainland enterprises listed on the SEHK. In 2007, equity funds raised by Mainland enterprises' amounted to $362.1 billion, which was 65 per cent of the total equity funds raised through the SEHK during the year. About $247.4 billion were raised in new listings of Mainland enterprises in Hong Kong, accounting for 85 per cent of the total equity funds raised in IPOs on the SEHK. The market capitalisation of Mainland enterprises accounted for 58 per cent of the SEHK's total market capitalisation at year-end. In 2007, the total annual trading turnover of Mainland enterprises accounted for 69 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.
Overseas intermediaries were increasingly interested in setting up business operations in Hong Kong. The number of Stock Exchange Participants2 (SEPs) has increased for the first time since 2000, rising from 425 at the end of 2006 to 439 at the end of 2007. The futures market also saw an increase in the number of Futures Exchange Participants (FEPs), from 135 at the end of 2006 to 140 at the end of 2007. Among the SEPS and FEPs, 133 and 65 respectively were owned by non-Hong Kong interests. In 2007, 24 new SEPs were admitted, including 21 from various regions around the world; seven new FEPS were admitted, of which six were from areas. outside Hong Kong.
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 2006 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 as well as banks which engage in asset management and other private banking activities (collectively referred to as 'registered institutions'), the combined fund management business of licensed corporations and registered institutions amounted to $6,154 billion at end-2006, up 36 per cent from $4,526 billion in 2005. SFC licensed corporations accounted for 75 per cent or $4,585 billion of the combined fund management business, and the rest was reported by registered institutions.
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
1 Mainland enterprises include H share companies, red-chip companies and non-H share Mainland
private enterprises.
2
Corporations with the right to trade on or through the Stock Exchange and be licensed under the Securities and Futures Ordinance to engage in such activity. Non-trading Stock Exchange Participants are not included.