ENG-2014 — Page 89

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Financial and Monetary Affairs

A vibrant securities and derivatives market

With a total market capitalisation of about $25 trillion at the end of 2014, Hong Kong's stock market ranked seventh in the world and third in Asia. The daily turnover averaged $69.5 billion in 2014. At the end of the year, 1,752 public companies were listed on the Stock Exchange of Hong Kong Limited (SEHK), representing a wide range of industries from finance and property to resources and telecommunications. In 2014, the SEHK ranked second worldwide in terms of initial public offering (IPO) funds raised, at $233 billion. In addition to new share issues, another $710 billion was raised on the secondary market, also ranked second globally. Moreover, the turnover of securitised derivatives of the Hong Kong Exchanges and Clearing Limited (HKEX) ranked first in the world for the eighth consecutive year.

At the end of 2014, some 876 Mainland enterprises' were listed on the SEHK, raising $4.4 trillion from the Hong Kong market since 1993. Hong Kong is also a listing destination for international companies. Funds raised by international and Mainland companies represented 87 per cent of IPO equity funds raised in 2014.

With the launch of Shanghai-Hong Kong Stock Connect on 17 November, Hong Kong and overseas investors are now allowed to trade eligible stocks in Shanghai's stock market, while Mainland investors are allowed to do the same in Hong Kong's stock market.

The Hong Kong Futures Exchange Limited (HKFE) operates a futures market in Hong Kong. Total turnover of derivatives contracts in 2014 was 142 million, the highest ever and an increase of about 10 per cent from 2013, largely driven by strong trading in stock options and index futures and options. Open interest at year-end was 7.96 million contracts, up from 6.23 million at the previous year-end. In 2014, After-hours Futures Trading accounted for approximately 6 per cent of day session trading volume.

As an international and open market, Hong Kong attracts many intermediaries from other markets to set up companies here and most international brokerages have branches in the city. At the end of 2014, 28 per cent of the 500 SEHK trading participants were from the Mainland or overseas markets, and 48 per cent of the 179 HKFE trading participants were from markets outside Hong Kong.

HKEX now operates four clearing houses (Hong Kong Securities Clearing Company Limited, HKFE Clearing Corporation Limited, SEHK Options Clearing House Limited and OTC Clearing Hong Kong Limited), providing integrated clearing, settlement, depository and nominee services for its participants or members.

1 Mainland enterprises include H-share companies, red-chip companies and non-H share Mainland private enterprises.

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