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Hong Kong Exchanges and Clearing Limited's (HKEx) Derivatives Market Transaction Survey 2008/09 (covering the period from July 2008 to June 2009) found that Exchange Participants' (EPs) principal trading supported half of the trading in HKEx's derivatives (futures and options) market and the other half had strong support from both local investors (primarily individuals) and overseas investors (primarily institutions).
In 2008/09, the turnover for the futures and options under study was 103 million contracts (referred to as the total market turnover in this survey), compared to 106 million contracts in 2007/08. Stock options remained the dominant product by turnover (as measured by contract volume), albeit with a drop in their contribution to total market turnover (from 56 per cent in 2007/08 to 49 per cent in 2008/09).
Some key findings of the 2008/09 survey
- EP principal trading (comprising market maker trading and EP proprietary trading) contributed 53 per cent of total market turnover (down from 61 per cent in 2007/08), 82 per cent of stock options turnover (vs 89 per cent in 2007/08) and 24 per cent of turnover in other futures and options (vs 26 per cent in 2007/08)
- Local investors contributed 25 per cent of total market turnover (up from 21 per cent in 2007/08), and overseas investors contributed 22 per cent (up from 19 per cent in 2007/08) .
- Retail investors contributed 23 per cent of total market turnover (up from 19 per cent in 2007/08), mostly from local retail investors (20 per cent). Institutional investors contributed 24 per cent in 2008/09 (up from 20 per cent in 2007/08), mostly from overseas institutional investors (19 per cent) (see Figures 2 and 3).
- Major products
- For Hang Seng Index (
- For Mini-HSI futures, the dominant contributors were local retail investors (58 per cent).
- For H-shares Index (HHI) futures, overseas investors were the major contributors (54 per cent: 49 per cent from institutions, 5 per cent from individuals).
- For HHI options, EP principal trading and overseas institutional investors were the major contributors (34 per cent and 28 per cent respectively).
- For stock options and HSI options, EP principal trading was dominant (82 per cent and 51 per cent respectively). - UK investors contributed the most to overseas investor trading in 2008/09 (29 per cent, compared to 32 per cent in 2007/08). US investors came second (19 per cent in 2008/09, down from 26 per cent in 2007/08). Australian investors ranked third (14 per cent in 2008/09, up from 11 per cent in 2007/08). Mainland China, European (excluding the UK) and Singaporean investors were also significant contributors (10-11 per cent in 2008/09).
- Retail online trading contributed 43 per cent of total retail investor trading (39 per cent in 2007/08) and 10 per cent to total market turnover (7 per cent in 2007/08).
The Derivatives Market Transaction Survey has been conducted annually along similar lines since 1994. The surveys for the latest four years covered HSI futures, HSI options, Mini-HSI futures, HHI futures, HHI options and stock options. These products together accounted for 98.9 per cent of the total turnover of the HKEx derivatives market during the study period of the 2008/09 survey. The survey had an overall response rate of 90 per cent and the respondents contributed 99 per cent of the total turnover during the study period.
The full report on the HKEx Derivatives Market Transaction Survey 2008/09 is available on the HKEx website at: http://www.hkex.com.hk/research/dmtrsur/DMTS09.pdf.
