TNAG-2467-FCO40-3591-Economic-situation-in-Hong-Kong-1992 — Page 68

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problems encountered in the wake of the 1987 stock market crash, when the Hong Kong Futures market had to be closed for several days. It is only now showing signs of increasing trading and developing new contracts. In Singapore by contrast SIMEX has linked up with the Chicago Mercantile Exchange to pioneer the world's first mutual offset trading system and a step towards 24-hour trading.

Table K: Futures Trading, January to June 1991

Source: Stock Exchange Quarterly

Contracts Traded

H191

H190

% change

Hong Kong

302,793

r/a

n/a

SIMEX

2,575,868

2,458,211

4.8

LIFFE+FOX

17,970,741

18,276,022

-1.7

Tokyo SE+TIFFE

13,937,947

11,382,532

22.5

(ii) Options

2.27 Hong Kong has no formal options market and the options market in Singapore is small relative to those in other parts of the region, notably Japan and Australia.

Fund Management

2.28 Anecdotal evidence suggests that the level of fund management in Hong Kong is considerably larger than that of Singapore. Radically different domestic circumstances probably account for much of this difference. Singapore has for many years had a government-run pension arrangement, the Central Provident Fund, providing relatively little incentive for Singaporeans to establish private pension funds. By contrast Hong Kong is only now contemplating compulsory pension arrangements and in this environment the working population has had to make their own arrangements. While Hong Kong residents have become adept at managing their own finances, often without professional assistance, the lack of compulsory pension schemes must also have provided an opportunity for fund managers to market their products to the working population in Hong Kong.

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