ENG-2000 — Page 109

FINANCIAL AND MONETARY AFFAIRS

secondary market with a total amount of $331 billion. Funds raised in H-shares and red-chips markets amounted to $334 billion, accounting for 74 per cent of the total funds raised in Hong Kong market during the year.

As regards stock options, contracts in respect of a total of 18 stocks were traded in the market by the end of the year. The average daily turnover of stock options contracts was 16 958 in 2000, representing an increase of 91 per cent over that of 1999.

During the year, the average daily turnover of Hang Seng Index Futures traded at the Hong Kong Futures Exchange (HKFE) decreased from 20 779 contracts in 1999 to 16 288 contracts in 2000, representing a decline of 22 per cent. The turnover of Hang Seng Index Options also decreased to 2 202 contracts a day in 2000, compared with 2 890 in 1999, representing a decrease of 24 per cent. The futures exchange also traded in four currency futures and 18 stock futures contracts.

Hong Kong has two active gold markets, in which the main participants are banks, major international and local bullion houses and gold trading companies. One is commonly known as the Loco-London gold market, with process quoted in US dollars per troy ounce of gold of 99.99 per cent fineness and with delivery in London. Trading in this market has expanded in recent years. The price of Loco-London gold moved between US$264 and US$315, and closed at US$273 in 2000, which was comparable to US$287.5 in 1999.

The Chinese Gold and Silver Exchange Society operates one of the largest gold bullion markets in the world. Gold traded through the society is of 99 per cent fineness, weighted in taels (one tael equals approximately 1.2 troy ounces) and quoted in Hong Kong dollars. Prices closely follow those in the other major gold markets in London, Zurich and New York. The price of gold at the Chinese Gold and Silver Exchange Society exhibited movement similar to that of Loco-London gold. At the end of the year, gold cost $2,537 per tael, compared with $2,692 at the end of 1999. Turnover on the exchange totalled 5.68 million taels in 2000.

The Hong Kong fund industry is characterised by its strong international flavour, both in terms of the presence of global fund managers and authorised funds. In a survey conducted by the commission in 2000, 150 intermediaries registered with the Securities and Futures Commission and exempt persons declared their primary business as portfolio management. About 85 per cent of these companies are subsidiaries or affiliates of international groups. The survey showed that total assets under management by these companies amounted to HK$3.5 trillion' (US$450 billion) at the end of 1999.

The number of authorised unit trusts and mutual funds increased to 1 860 at the end of 2000, compared with 1 583 a year earlier. The Tracker Fund of Hong Kong (TraHK), which was offered in October 1999 and contains a portfolio of Hang Seng Index (HSI) constituent stocks, was well received by the market. The market capitalisation of the TraHK amounted to $28.6 billion by the end of 2000.

The Hong Kong insurance industry also has a strong international presence. Among the 205 authorised insurers at the end of 2000, 105 were insurers from 24 overseas countries or the Mainland while 12 of the world's top 20 insurers were authorised to carry on insurance business in Hong Kong either directly or through a

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Exclude assets that were managed by banks

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