ENG-2002 — Page 107

FINANCIAL AND MONETARY AFFAIRS

and 3 188 contracts in 2001 to 19 602 contracts and 4 522 contracts in 2002, respectively, representing increases of 7.6 per cent and 42 per cent. The turnover of Hang Seng Index Options also increased to 4 369 contracts in 2002, compared with 2965 in 2001, representing an increase of 47 per cent. Besides Index futures and options, the HKFE also traded 32 stock futures contracts. Following the success of the Mini-HSI Futures, the Mini-HSI Options were launched on November 18.

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 Securities and Futures Commission (SFC) in 2002, 172 intermediaries registered with the commission and exempt persons declared their primary business as fund management managing portfolios and/or giving advice on investment. The total assets under management by the portfolio managers amounted to $1,484 billion (US$190.3 billion)2 at the end of 2001.

The number of authorised unit trusts and mutual funds increased to 1906 at the end of 2002 (excluding Mandatory Provident Fund-related unit trusts), compared with 1 893 at the end of 2001.

Hong Kong operates one of the most active physical gold markets in the world. Spot gold can be traded through two closely related yet independent markets in the city the Chinese Gold and Silver Exchange Society and the Loco-London gold market.

The society, established in 1910, provides trading of both tael bars and kilo bars in Hong Kong dollars3. Prices closely follow those in the other major gold markets in London, Zurich and New York. Loco-London gold quotation is made in US dollars per troy ounce of gold.

Hong Kong continues to be one of the most open insurance centres in the world. Among the 195 authorised insurers at year-end, 99 were insurers from 25 overseas countries or the Mainland. Eleven of the world's top 20 insurers are authorised to carry out insurance business in Hong Kong either directly or through a group company. There are 27 professional reinsurers, including most of the top reinsurers in the world. Gross premium income in 2001 was $76.3 billion, approximately 5.9 per cent of Hong Kong's Gross Domestic Product (GDP).

Financial Services in Hong Kong

Banking Sector

Main Features

Hong Kong maintains a three-tier system of deposit-taking institutions, namely, licensed banks, restricted licence banks and deposit-taking companies. They are collectively known as authorised institutions (AIs) under the Banking Ordinance. The Hong Kong Monetary Authority (HKMA) is the licensing authority for all three types of AIs.

2 Excluding assets that were managed by registered intermediaries or exempt persons who did not declare

advisory or management of funds as their primary business (e.g. banks).

3 Tael bars are of 99 per cent fineness and weighted in taels (one tael equals approximately 1.20337 troy ounces).

Kilo bars are of 999.9 parts per thousand fineness and weighted in kilograms.

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