ENG-1993 — Page 101

FINANCIAL AND MONETARY AFFAIRS

remaining 30 on floating-rate terms. At the end of the year, the outstanding value of Hong Kong dollar-denominated negotiable certificates of deposit amounted to $33.5 billion, compared with $26.9 billion a year earlier; 54 per cent of these were held outside the local banking sector.

Of the 20 new issues of commercial paper and other debt instruments reported to the Securities and Futures Commission during 1993, eight were denominated in Hong Kong dollars.

The local stock market was very buoyant in 1993. Favourable corporate results helped push the Hang Seng Index up to new records throughout the year. Stimulated by an influx of overseas funds in the fourth quarter, the Hang Seng Index saw a remarkable advance from October when the strong momentum was supported by heavy turnover. The Index rose to a record high of 11 959.06 on December 30, before closing the year at 11 888.39 · 115.67 per cent higher than the level recorded at the end of 1992. Although most Asian stock markets also reported outstanding gains during the year, the performance of the Hong Kong stock market ranked second in the region and also second among the top 15 major stock markets in the world. Average daily turnover in the local stock market also rose substantially to $4.9 billion in 1993, compared with $2.8 billion in 1992.

The number of newly-listed companies was 68, raising a total of $28.9 billion. Among these newly-listed companies, six were state-owned enterprises of the People's Republic of China. They attracted particular market attention. The listing of these enterprises in Hong Kong was one of the most important market development initiatives in recent years. The six enterprises, which together raised a total of $8.1 billion, were among the nine selected by Chinese authorities in early 1992 to apply for a listing in Hong Kong.

In addition to new share issues, funds were tapped through rights issues ($9.3 billion) and private placements ($35 billion).

The Hong Kong Futures Exchange launched options contracts on Hang Seng Index futures on March 5. The instrument was well-received by market practitioners and was traded actively, with the highest turnover of 6 147 contracts being recorded on October 15. Trading in Hang Seng Index futures was also buoyant. The average daily turnover increased considerably to 9 597 contracts in 1993, with a post-1987 crash high of 26 288 contracts reported on November 24, compared with the daily average of 4 347 contracts in the preceding year. Hang Seng Sub-Index futures were, however, unable to share a similar level of activities, while the trading of gold futures and interest rate futures remained inactive.

The price of Loco-London gold moved between US$325 to US$409 in 1993. Partly attributable to the buying wave from Japanese investors due to the weak US dollar and the concerns of inflationary pressure in the United States of America, the price of gold rose from US$333 per troy ounce at the end of 1992 to US$408.80 per troy ounce in early August. It then fell to around US$342.70 per troy ounce, but rebounded to US$391 per troy ounce at the end of the year.

The price of gold at the Chinese Gold and Silver Exchange Society exhibited similar movement. At the end of the year, gold cost HK$3,592 per tael. Turnover on the exchange totalled 25 million taels in 1993.

The number of unit trusts and mutual funds decreased slightly to 895 at the year's end, from 900 a year earlier. Of the 112 newly-authorised funds approved by the Securities and Futures Commission during the year, many were invested in the emerging markets of Asia

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