TNAG-2475-FCO40-3605-Hong-Kong-exchange-fund-report-and-accounts-for-1991-1992 — Page 22

CONFIDENTIAL

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27.

In view of the increasing demand for the Bills, the Financial Secretary, with the advice of the Exchange Fund Advisory Committee, approved on 17 April 1991 new issue ceilings as follows:

old

new

ceiling

ceiling

91-day Bills

$400mn

$500mn

182-day Bills

$200mn

$400mn

364-day Bills

$200mn

$300mn

Additional

Bills up to 20% of the new issue ceilings for the

91-day and 182-day Bills and 30% for the 364-day Bills may be held in reserve by the Exchange Fund for supply to Market Makers in the

secondary market.

28.

year.

Secondary market activity expanded quickly during the Average daily turnover increased from $3 billion in January to a record high of $7.7 billion in October. Seven new Market

Makers were appointed in the year to cope with the increasing

volume of activity. They were Chase Manhattan Bank N.A., Mitsubishi Finance (H.K.) Ltd., Nanyang Commercial Bank Ltd., Wardley Ltd., Wing Lung Bank Ltd., Morgan Guaranty Trust Co. of New York and Mitsui Taiyo Kobe Asia Ltd.

29.

As at 31 December 1991, there were $14.04 billion Bills outstanding (including the reserve held by the Exchange Fund), comprising $7.8 billion in 91-day Bills, $3.38 billion in 182-day

Bills and $2.86 billion in 364-day Bills.

CONFIDENTIAL