Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Zeti Akhtar Aziz
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Carmen Chu
Alan Au
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
515.5995

Press Releases

Results of 1998 Survey of the Turnover of Foreign Exchange and OTC Derivatives Markets in Hong Kong

The triennial survey of the foreign exchange and derivatives markets in Hong Kong showed that the average net daily turnover of foreign exchange and OTC derivatives transactions in Hong Kong amounted to US$82.4 bn in April 1998 (a decline of 12.8% from the US$94.4 bn in 1995 and equivalent to an annual compounded decline of 4.5%). The overall figure was made up of US$78.6 bn foreign exchange(a) transactions (US$90.2 bn in 1995) and US$3.8 bn OTC derivatives(b) transactions (US$4.2 bn in 1995).

"The decline in turnover reflects changing market circumstances, including particularly the impact of the Asian crisis and the depreciation of certain major currencies against the US dollar," said Mr. David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority which conducted this survey. "Despite this, the latest figures show that Hong Kong remains a major centre for trading in foreign exchange and derivatives".

Hong Kong has participated in this international survey coordinated by the Bank for International Settlement (BIS) since 1989. Reflecting increasing attention on the foreign exchange and derivatives markets, there were 43 participants(c) in the 1998 survey, up from 26 in 1995. All authorised institutions and some major securities houses were invited to participate in the 1998 survey. The 366 reporting institutions comprised 177 licensed banks, 66 restricted licence banks, 111 deposit taking companies and 12 securities houses.

Release of survey results

Many participants will release their survey results simultaneously today. The BIS will publish the preliminary global results on 19 October 1998.

A detailed report covering the global results of both the turnover and amount outstanding sections will be released in the Spring of 1999.

New reporting changes

The key change in the survey content is the exclusion of Exchange Traded Instruments which are collected through a different channel and which will be reported on a global basis only. All futures transactions are thus excluded from the 1998 survey. Comparable figures have been adjusted accordingly to facilitate comparison.

Currency composition

Consistent with the 1995 survey, in terms of foreign exchange transactions, US dollar against Japanese Yen remained the most heavily traded currency pair in 1998 (25% of average net daily turnover). However, US dollar against Hong Kong dollar (22%) has replaced US dollar against Deutschemark (20%) as the second common currency pair.

In line with declining turnover in foreign exchange transactions, turnover of most currency pairs shrank in 1998. These included US dollar against Japanese yen and US dollar against Deutschemark. However, turnover in US dollar against Hong Kong dollar was 22% higher in 1998 than in 1995.

In relation to derivatives transactions, US dollar against Japanese yen was the most frequently traded (46% of total gross turnover) for foreign exchange derivatives. US dollar interest rate derivatives represented the largest share of the gross turnover of all interest rate derivatives in both the 1998 and 1995 surveys, up from 44% in 1995 to 46% in 1998. Hong Kong dollar interest rate derivatives, largely boosted by the increase in volatility of domestic interest rates, ranked second with their share rising from 13% in 1995 to 34% in 1998. Japanese Yen interest rate derivatives ranked third with their share declining from 42% in 1995 to 10% in 1998, attributable to the more flattened Japanese yield curve.

Type of transactions

Of the foreign exchange transactions, forward transactions (including both outright forwards and foreign exchange swaps) comprised a large proportion of net daily turnover at 61% (62% in 1995) while spot transactions contributed to 39% (38% in 1995) of the total.

Similar to the 1995 survey, activity was mainly concentrated on forward transactions of shorter maturities. Some 70% of the transactions matured within seven days.

Foreign exchange derivatives experienced a significant increase of 92% over 1995 with both currency swaps and currency options registering robust growth. Interest rate derivatives on the other hand declined by 31%, due largely to a significant fall in forward rate agreements. Interest rate swaps accounted for the largest share of interest rate derivatives (80%).

Counterparty analysis

As in the 1995 survey, a large proportion of the average net turnover of foreign exchange and derivatives transactions was carried out with overseas counterparties (72%). There was however an increase in the share of transactions with local counterparties from 25% in 1995 to 28% in 1998, reflecting more local participation. Of the transactions with local counterparties, 16% was with authorised institutions in Hong Kong, 2% with other local financial institutions and 10% with local non-financial customers. The share of transactions conducted through brokers was unchanged, at about 34%.

Market concentration

Local authorised institutions participating in the survey saw an increase in their share in gross turnover of foreign exchange and derivatives transactions to 22% (15% in 1995). The share of foreign authorised institutions accordingly fell from 84% to 73%. Securities houses made up the remaining 5% in 1998 (less than 1% in 1995).

Market concentration recorded no visible change between 1995 and 1998, with the top 10 players accounting for about 51% of gross turnover and the top 30 players, 78%.

Note to Editor

Three tables will be faxed, showing the turnover figures for the reporting institutions, broken down by currency and instruments for the foreign exchange transactions and by instruments for the derivatives transactions.

A more comprehensive analysis of the survey results as well as a comparison with other participants will be provided in the November issue of the Quarterly Bulletin of the Hong Kong Monetary Authority.

For further enquiries, please contact the Press and Publications Section, Hong Kong Monetary Authority, at telephone 2878 1480.

 

(a) Includes spot, outright forward and foreign exchange swaps transactions.

(b) Includes currency swaps and options, interest rate swaps and forward rate agreements only. Outright forward and foreign exchange swaps transactions were included as part of both the foreign exchange and derivatives transactions in the 1995 survey. They are now excluded from derivatives transactions in the 1998 survey as redefined by the BIS. The 1995 comparatives have been adjusted to facilitate proper comparison.

(c) These are Argentina, Australia, Austria, Bahrain, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, South Korea, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Saudi Arabia, Singapore, Spain, South Africa, Sweden, Switzerland, Taiwan, Thailand, United Kingdom and United States.


Hong Kong Monetary Authority

29 September 1998

Last revision date: 1 August 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Information in Other Languages (Bahasa Indonesia, हिन्दी, नेपाली, ਪੰਜਾਬੀ, Tagalog, ไทย, اردو)
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery