ENG-2010 — Page 126

84 | Financial and Monetary Affairs

Recent Developments

The Hong Kong banking sector remained resilient in 2010. The strength in loan. growth and improved asset quality reflected the favourable global economic and financial conditions. The capital position of locally incorporated Als also remained sound.

Before the end of March 2010, investigations had been completed in over 99 per cent of Lehman Brothers-related complaints. And, by the end of 2010, over 77 per cent of the complaints had been resolved.

With the approval of the Legislative Council, amendments to the Deposit Protection Scheme Ordinance and its subsidiary legislation were made in 2010 to effect the enhancement measures as recommended by the Hong Kong Deposit Protection Board. The enhanced Deposit Protection Scheme increased the protection limit from HK$100,000 to HK$500,000 per depositor per bank. This and other relevant enhancements will come into operation on January 1, 2011, following the expiry of the Government's Full Deposit Guarantee on December 31, 2010.

Securities and Futures Sector

Main Features

The securities market in Hong Kong is operated by the SEHK and futures market, the Hong Kong Futures Exchange Limited (HKFE), both being wholly owned subsidiaries of the HKEX.

By the end of 2010, there were 1 413 companies listed on the Main Board and the Growth Enterprises Market (GEM) of the SEHK with a total market capitalisation of about $21,077 billion, raising an aggregate of $859 billion within the year. The total turnover of the securities market amounted to $17,210 billion.

The ETFS market continued to expand in 2010. During the year, 27 new ETFs were authorised, increasing the total number of ETFs listed on the SEHK to 69, offering a wide range of investment exposures to world, regional and Mainland indices and commodities for investors. Turnover of ETFs reached a record high of $604.5 billion. In 2010, the fourth Hong Kong ETF was cross-listed on the Taiwan Stock Exchange. The mix of ETF managers was also expanded, with the authorisation of the first ETF that is managed by a Hong Kong subsidiary of a Mainland financial institution and the first ETF that is managed by a Hong Kong asset management subsidiary of a Korean investment and securities group.

The number of newly listed derivative warrants was 7 826 in 2010. A total of 5 148 derivative warrants were listed on the securities market at the end of 2010. Turnover of derivative warrants was $2,692 billion during the year. At the end of 2010, there were 1 064 Callable Bull/Bear Contracts (CBBCs) listed in Hong Kong. Turnover of CBBCs decreased from $1,676.1 billion in 2009 to $1,455.4 billion in 2010. Stock options turnover increased from 47 439 896 contracts in 2009 to 61 125 647 contracts in 2010, which was the highest ever.