Hong Kong Securities, Futures Markets Up 159%

by Mary Swire, Tax-News.com, Hong Kong

16 January 2008

Hong Kong's securities and futures markets set new records last year with total turnover up 159% on the previous record set in 2006, to USD21.7 trillion, it emerged on Wednesday.

Reviewing the securities market's performance last year, Hong Kong Exchanges & Clearing Chief Executive Paul Chow revealed that the average daily turnover rose 166% on the 2006 record to USD88.1 billion.

Single-day turnover reportedly surged to USD210.5 billion on October 3, breaking the USD79-billion record set on August 28, 1998. The single-month turnover of USD3.5 trillion recorded in October was 222% higher than the November 2006 record.

Turnover of H-shares last year tripled the record set in 2006 to USD7.8 trillion. The turnover of derivative warrants also rose 162% on the record set in 2006 to USD4.7 trillion.

The HKEx chief further revealed that last year saw 6,312 newly listed derivative warrants breaking 2006's record of 2,823. Total equity capital raised also grew 6.5% from the 2006 record to USD558.5 billion.

Mr Chow said that last year's derivatives market performance broke all the previous records, with the volume of futures and options doubling to 88 million contracts.

The volume of Hang Seng and Mini-Hang Seng Index Futures grew 35% and 102% on the previous records of 17 million and 4.3 million contracts. The volume of H-share Index Futures and Stock Options surged 122% and 154% to 11 million and 46 million contracts.

Mr Chow announced that Mini H-shares Index Futures will be launched March 31, adding that HKEx is considering the admission of remote participants, and will liaise with Securities & Futures Commission on suspending the securities market's tick rule.

April will see the launch of five-digit stock codes, and May the introduction of closing auctions. The depositary receipt regime and enhanced growth enterprise market will launch in the year's third quarter.

Mr Chow went on to state that the exchange participants admission and registration function will be streamlined, and the shareholding disclosure service rolled out in the year's second quarter.

In addition, HKEx will discuss with the Government broader stamp duty exemptions or relief for certain transactions to minimise inconsistencies. HKEx fees will be reviewed to ensure they are reasonable and competitive.

On market quality enhancement Mr Chow said that changes in suspension policy will be implemented, and a designated issuer website launched in February. Consultation conclusions on periodic financial reporting and proposed changes to the listing rules will be published in the year's second and third quarters.

Mr Chow concluded by revealing that HKEx's market and trading systems will be upgraded this year, adding that the second quarter will see a pact with Securities & Futures Commission on system requirements, to facilitate electronic submission of disclosure of interest filings.

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