- 5 -
Results of 1995 Survey of the Derivatives Market in IK
The Hong Kong Monetary Authority (HKMA) has conducted for the first time The results are a survey on the size of the derivatives market in Hong Kong. summarised in the table below -
Hong Kong is the world's fifth largest trading centre for foreign exchange derivatives in the world. The average turnover amounted to US$56 billion per business day during April 1995, after adjustment to eliminate double counting between reporting institutions in Hong Kong (1). This represented about 6% of the global total.
The interest rate derivatives market of Hong Kong ranked eighth in the world, with an average turnover of US$18 billion per day in April 1995.
The following table shows the turnover and stock (that is outstanding amount of contracts) figures for different types of derivatives. As shown from the table, foreign exchange and interest rate derivatives were far more frequently used than derivatives on equities, stock indices and commodities.
Average daily
(US$ billion)
Outstanding amount at end March 1995
turnover
Notional amount
Market value
Type of
during
derivatives
April 1995
All
OTC only
OTC only
Foreign exchange
56
970
966
60
Interest rate
18
666
477
6
Equity and stock
N.A.
6
5
1
index
Commodity
N.A.
2
0
Total
74
1,644
1.450
67
The market value of outstanding derivatives contracts was very small as compared to the notional amount, reflecting the large amount of leverage possible in using derivatives.