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Financial and Monetary Affairs
representing a wide range of industries from banking and property to resources and telecommunications. In 2012, the stock market of Hong Kong remained in the top five worldwide in terms of IPO funds raised. In addition to new share issues, another $215 billion was raised on the secondary market.
At the end of 2012, some 721 Mainland enterprises2 were listed on the SEHK, raising $3.2 trillion from the Hong Kong market since 1993. Hong Kong is also an increasingly attractive listing destination for international companies. Funds raised by these international and Mainland companies represented 90 per cent of IPO equity funds raised in 2012.
Overseas intermediaries are increasingly interested in setting up companies in Hong Kong. The number of Exchange Participants (EPs)3 trading on the SEHK and the Hong Kong Futures Exchange Limited (HKFE) increased from 498 and 182 at the end of 2011 to 511 and 185 respectively at the end of 2012.
International fund managers are strongly represented in the asset management industry. At the end of 2012, 935 companies were licensed or registered to carry out asset management business in Hong Kong, a rise of 5.8 per cent from a year earlier. International financial institutions also maintain a strong presence in Hong Kong. Of the world's top 100 banks, 70 operate in Hong Kong. At year-end, 146 of the 155 licensed banks in Hong Kong were beneficially-owned by parties outside Hong Kong.
The interbank money market is well established. Hong Kong-dollar wholesale deposits are traded actively among local Als, and between local and overseas Als, with an average daily turnover of $230.3 billion in 2012.
Hong Kong has a robust real time gross settlement (RTGS) interbank payment system. All banks in Hong Kong maintain settlement accounts with the Hong Kong Monetary Authority (HKMA) through the Hong Kong dollar RTGS system. All RTGS payment transactions are settled in real time. The banks may obtain intra-day and overnight liquidity through repurchase agreements with the HKMA using the Exchange Fund Bills and Notes (EFBNs) as collateral.
US dollar, euro and RMB RTGS systems also enable transactions in these currencies to be settled in real time, eliminating settlement risk. RTGS systems in Hong Kong are linked to enable foreign-exchange transactions to be settled on a payment-versus-payment basis.
The HKMA's Central Moneymarkets Unit (CMU) provides clearing, settlement and custodian services for EFBNs and other Hong Kong dollar or foreign-currency private debt securities. It is linked to a number of international and regional central securities depositories to enable non- local investors to hold and settle securities lodged with the CMU and local investors to hold and settle securities lodged with overseas systems. Through its integration with the RTGS systems, the CMU enables securities to be settled on a delivery-versus-payment basis, enhancing
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Mainland enterprises include H-share companies, red-chip companies and non-H share Mainland private enterprises.
An EP is a corporation that may trade on or through the SEHK or the Hong Kong Futures Exchange Limited and is licensed under the Securities and Futures Ordinance to carry on securities/futures/options dealing activity.
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