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THURSDAY, JUNE 6, 1991
THE REPORT ALSO NOTED THAT THE BILLS ARE VERY ACTIVELY TRADED IN THE SECONDARY MARKET, AS CAN BE SEEN FROM HIGH TURNOVER FIGURES. THE AVERAGE DAILY TURNOVER SINCE JANUARY THIS YEAR IS $4 BILLION, WHICH IS NEARLY 40 PER CENT OF THE TOTAL AMOUNT OF BILLS OUTSTANDING.
EVEN AFTER THE UNEXPECTED INTEREST RATE HIKE BY ONE PER CENT ON MAY 24, THE BILLS MARKET HAS REMAINED ACTIVE, THE REPORT SAID.
THE AVERAGE DAILY TURNOVER IN THE SECONDARY MARKET HAS ACTUALLY BEEN HIGHER AT AROUND $5.6 BILLION. THE BILLS TENDERED ON MAY 28 AND JUNE 4 WERE OVERSUBSCRIBED.
THE DIRECTOR OF THE OFFICE OF THE EXCHANGE FUND, MR JOSEPH YAM, SAID HE WAS PLEASED WITH THE DEVELOPMENT OF THE EXCHANGE FUND BILLS PROGRAMME.
HE SAID WITH THE JOINT EFFORT OF THE MARKET MAKERS, THE SECONDARY MARKET REMAINED ACTIVE AND LIQUID DESPITE THE RECENT VOLATILITY IN INTEREST RATES.
"THIS IS A GOOD REFLECTION OF THE INTEGRITY OF THE BILLS MARKET MR YAM SAID.
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IN ORDER TO DEVELOP GREATER DEPTH OF THE BILLS MARKET, THE OFFICE OF THE EXCHANGE FUND WILL SHORTLY APPOINT ADDITIONAL MARKET MAKERS.
"THE INFRASTRUCTURE FOR AN EFFECTIVE PAPERLESS MARKET HAS BEEN BUILT UNDER THE BILLS PROGRAMME. THIS WOULD PAVE THE WAY FOR THE DEVELOPMENT OF AN EFFICIENT MARKET FOR GOVERNMENT DEBT, A FEATURE WHICH HAS HITHERTO BERN LACKING IN A FINANCIAL CENTRE OF HONG KONG'S STATUS, MR YAM SAID.
THE OFFICE OF THE EXCHANGE FUND ALSO ANNOUNCED THAT WITH EFFECT FROM MONDAY (JUNE 10), IT WILL PUBLISH BACH DAY THE TOTAL AMOUNT OF EXCHANGE FUND BILLS TRANSFERRED BETWEEN BILLS ACCOUNTS MAINTAINED WITH IT AND THE CLOSING YIELDS OF BILLS WHICH WILL MATURE IN APPROXIMATELY ONE WEEK, ONE MONTH, THREE MONTHS, SIX MONTHS AND ONE YEAR'S TIME.
"WITH A SUBSTANTIAL TURNOVER, THE CLOSING YIELDS CAN SERVE AS USEFUL BENCHMARKS FOR INTERRANK DEPOSITS OF SIMILAR MATURITIES.
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*I EXPECT THAT THE PUBLICATION OF THE INFORMATION CAN HELP GENERATE MORE ACTIVITY IN THE INTERBANK MARKET ESPECIALLY THOSE LONGER MATURITIES OF SIX MONTHS TO ONE YEAR, MR YAM SAID.
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