The Year 2006 in Review. The Year 2006 in Review STOCK MARKET

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1 Fact Book 2006 The year 2006 in review Major events of the Hong Kong securities and derivatives markets 2006 Market highlights Securities market - Main board - market indices - listing statistics - market capitalisation - trading statistics and analysis - short selling - listed companies - warrants - callable bull/bear contracts - debt securities - unit trusts and mutual funds - equity linked instrument - historical section - world stock markets Securities market - Growth enterprise market (GEM) - market indices - listing statistics - market capitalisation - trading statistics and analysis - listed companies - warrants Derivatives market - equity index products - interest rate products - equity products - historical section Clearing statistics Exchange participants Clearing participants The investing community Hong Kong securities and derivatives markets historical events Appendices

2 The Year 2006 in Review The Year 2006 in Review With strong economic growth in Hong Kong and Mainland China, the HKEx securities and derivatives markets performed strongly and set new records in The total market capitalisation of the securities market (including the Main Board and the Growth Enterprise Market (GEM)) reached a new high of HK$13,339.9 billion on 28 December As at the end of 2006, Hong Kong ranked 3rd by total equity funds raised, 2nd by new listings funds raised and 6th by market capitalisation among members of the World Federation of Exchanges 1. The annual market turnover reached a new high of HK$8,376.3 billion in 2006, a growth of 85% over the previous year. A total of 62 companies newly listed on the Main Board and GEM in 2006, raising a total of HK$333.9 billion. The Hang Seng Index (HSI) reached a new historical high of 20,001 points on 28 December At the year-end, the HSI closed at 19,964 points, representing a year-on-year increase of 34%. The Hang Seng China Enterprises Index (H-shares Index) soared by 94% to end the year at 10,340 points, while the Hang Seng China-Affiliated Corporations Index (the Red-Chips Index) surged by 72% to 3,330 points. The average daily turnover of the Main Board in 2006 was HK$33.7 billion, up 85% from that in The S&P/HKEx GEM Index closed at 1,224 points at the end of year, representing a year-on-year increase of 22%. GEM average daily turnover in 2006 was HK$ million, a 96% increase from the previous year. Trading in the HKEx derivatives (futures and options) market soared in A total of million futures and options contracts were traded in 2006, a 68% increase from The average daily derivatives turnover was 173,708 contracts (80,418 contracts in futures and 93,290 contracts in options), representing a year-on-year increase of 68%. STOCK MARKET Market development Listing The year 2006 saw developments in the listing and regulatory regimes and the structured products market and progress in the review of GEM. Progress was made in the establishment of a new listing decision-making structure. Related amendments were made to the Main Board and GEM Listing Rules, effective 19 May 2006, leading to changes in the composition and term of the Listing Committees. The number of Listing Committee members was expanded to at least 28 members including the HKEx Chief Executive, at least 8 appointed investor representatives and 19 other appointed members. In September, the Securities and Futures Commission (SFC) released its Guidelines for Sponsors and Compliance Advisers which contain new entry criteria and on-going obligations for sponsors, with an aim of raising sponsor standards. In line with the SFC s new guidelines, in October HKEx amended the related Listing Rules to reflect the sole responsibility of the SFC in the licensing, discipline and sanctioning of sponsors and compliance advisers. The Stock Exchange would accept a SFC-licensed or -registered firm to work as a sponsor or compliance adviser. The guidelines and amended rules took effect on 1 January Another development in the listing regime was the SFC s decision on initiatives to conclude the reform of the prospectus regime. Major identified initiatives included consolidating laws in relation to public offerings of shares and debentures into the Securities and Futures Ordinance, changing the focus of the prospectus regime from a document-based to a transaction-based approach, and imposing greater liability on issuers, offerors and responsible persons for the prospectus. 1 World Federation of Exchanges Monthly Statistics December HKEx Fact Book 2006

3 The Year 2006 in Review To enhance scrutiny over the financial reporting of listed companies, the Financial Reporting Council was formally set up with its chairman appointed by the Government in November. The Council is endowed with the authority to investigate audit irregularities and accounting non-compliance among listed companies in Hong Kong. Following public consultation, HKEx decided to move ahead to abolish the requirement for Main Board issuers to publish paid announcements in newspapers and to adopt a purely web-based news dissemination regime. The aim was to enhance the timeliness and cost effectiveness of information disclosure and the accessibility of disclosed information. After a transition period, all Main Board and GEM issuers must have their own website on which they must publish announcements and other listing documents in addition to publication on the HKEX website or GEM website. In considering the further development of GEM, HKEx released in January a discussion paper to provide possible structural options and to invite market views. Efforts were made by the SFC and HKEx to enhance the regime for the trading of structured products. The SFC decided to proceed with its Six-Point Plan for the derivative warrants market it proposed in Accordingly, HKEx introduced a web-based Derivative Warrant Resource Centre in May to provide more investor education and better information dissemination. In September, HKEx amended the Listing Rules in respect of derivative warrants, banning commission rebate schemes and facilitating further issues. Another major development in the structured products market was the introduction of Callable Bull/Bear Contracts (CBBC) in June, with 7 CBBCs at launch. Trading, clearing and settlement Trading began in the newly renovated Trading Hall from 16 January HKEx further enhanced its market systems. It completed the second phase of the network consolidation project by migrating all Participant network connections in the Third Generation Central Clearing and Settlement System (CCASS/3) to SDNet. As a result, the majority of Clearing Participants started saving about 20% of their previous monthly network charges. In May, the maximum number of outstanding orders per price queue was increased from 4,000 to 8,000 in the Third Generation Automated Order Matching and Execution System (AMS/3). In July, HKEx reduced the minimum trading spread from the previous range of HK$0.025 to HK$0.05 to a new spread of HK$0.01 for securities trading between HK$2 and HK$10; and from HK$0.05 to HK$0.02 for those trading between HK$10 and HK$20. Actions were also taken by HKEx to expand its clearing services to participants outside Hong Kong. In March, the PRC National Council for Social Security Fund was admitted to CCASS as a Corporate Investor Participant. In June, the Investor Participant (IP) account service was expanded to Macau individual investors and Macau-incorporated companies. Investor protection was further enhanced with the introduction of new SFC measures in October to address securities margin financing risks. Transaction costs were reduced as a result of the Government s 20% reduction of the transaction levy payable to the SFC in respect of any trading in securities, futures and option contracts, effective 1 December Main Board Equities The year saw the listing in Hong Kong of 3 more Mainland-incorporated banks Bank of China (BOC), China Merchants Bank (CMB) and Industrial and Commercial Bank of China (ICBC). ICBC s Hong Kong and international offerings raised over HK$124.9 billion and was the ever largest initial public offer (IPO) in Hong Kong. ICBC was also the first Mainland enterprise with simultaneous listing of H shares in Hong Kong and A shares in the Mainland Shanghai Stock Exchange. Together with it s A share issue, it was the largest IPO by total funds raised (US$19.1 billion) in world stock market history. 2 HKEx Fact Book 2006

4 The Year 2006 in Review By year end, there were 975 listed companies on the Main Board versus 934 in Among them, 95 companies were H share companies and 86 were red chips, with year-end market capitalisation of HK$3,363.8 billion and HK$2,951.6 billion respectively. H shares and red chips together constituted 48% of the Main Board market capitalisation. Fifty-six companies newly listed on the Main Board in 2006 (17 were H share companies), raising a total of HK$332.1 billion of new capital. As at the end of 2006, the total market capitalisation of the Main Board was HK$13,248.8 billion against HK$8,113.3 billion in The HSI rose 34% from 2005 year-end level to close at 19,964 points in Mainland-related stocks had sharp year-on-year increases 94% for the H-shares Index and 72% for the Red-Chips Index. In September the HSI included an H-share company for the first time. At the year end, 3 of the 36 constituent stocks in the HSI were H-shares. Along with the increasing market significance of H-shares, the Hang Seng China H-Financials Index was launched in November with initially eight constituents. It closed the year at 12,935 points. The S&P/HKEx LargeCap Index rose by 43% year-on-year to 24,378 points. The Hang Seng Composite Index closed at 2,802 points, 44% upon the previous year. In addition, all four sectors of the HSI finance, utilities, properties and commerce & industry rose, marking year-on-year increases of 22%, 12%, 29% and 49% respectively. Main Board equities recorded a total turnover of HK$6,423.3 billion, up 79% when compared with Main Board Warrants The number of newly listed derivative warrants reached a record high of 2,823 with a total issued premium of HK$247.8 billion in 2006, compared with 1,682 warrants and a premium of HK$154.8 billion in In addition, 12 equity warrants were issued in the year without premium. The total turnover value of derivative and equity warrants was HK$1,792.8 billion, up 109% from the previous year. As at the end of 2006, there were 27 listed equity warrants and 1,959 derivative warrants. Main Board Debt securities There were 180 debt securities listed as at the end of 2006, with a turnover of HK$6.25 million (a year-on-year decrease of 40%). Nevertheless, the primary market was more active 46 debt securities were newly listed in the year compared to 32 in 2005, raising HK$64.9 billion, a 7% increase over a year earlier. Main Board Unit trusts and mutual funds At the end of 2006, a total of 15 unit trusts/mutual funds were listed, compared with 13 in Among them, 9 were Exchange- Traded Funds (ETFs) and 5 were Real Estate Investment Trusts (REITs). There were 3 new listings in the year (one was ETF and two were REITs), raising HK$9.0 billion. The annual turnover value increased by 104% to HK$105.3 billion, of which HK$57.9 billion (55%) and HK$47.4 billion (45%) were contributed by ETFs and REITs respectively. 3 HKEx Fact Book 2006

5 The Year 2006 in Review Main Board Equity Linked Instruments (ELI) The ELI market was completely quiet in 2006 with no newly listed issues, no trading and no listed ELIs at the end of Main Board Callable Bull/Bear Contracts (CBBC) CBBCs were introduced in June Up to the end of 2006, 83 CBBCs were newly issued, with a total premium of HK$4.1 billion. The total turnover value in the year (for approximately 7 months) was HK$11.3 billion, representing a daily average of HK$80.39 million. At the end of 2006, there were a total of 24 listed CBBCs. Growth Enterprise Market (GEM) There were 198 listed companies on GEM as at the end of 2006 comparing to 201 in Among them, 46 were H share companies with a year-end market capitalisation of HK$15.0 billion. The total market capitalisation of GEM was HK$88.9 billion, up 33% from HK$66.6 billion in The number of new listings on GEM was 6 (all were H share companies), raising a total of HK$1.8 billion of new capital. The total turnover value on GEM in 2006 was HK$43.7 billion, a 96% increase from the previous year. Trading-only market As at the end of 2006, two ishares and seven Nasdaq stocks were quoted on the trading-only market. Trading on the market further contracted turnover was HK$15.13 million in 2006 compared to HK$17.09 million in 2005 and HK$32.82 million in DERIVATIVES MARKET Market development In 2006, enhancements were made in product provision and trading measures. On 31 March, three long-dated contract months in H-shares Index options and three additional long-dated contract months in HSI options were introduced. On 10 February, position limits and reporting levels for stock options were adjusted. A single reporting level per option class was adopted instead of separately for Tier 1 and Tier 2 classes. A single position limit per option class in one market direction for all expiry months was also adopted instead of net position limit separately for Tier 1 and Tier 2. To increase price transparency and to facilitate trade execution, stock options market-maker obligations were revised on 3 July The response time to quote requests was reduced, and the holding time of quotes and the minimum number of option series per class covered were increased. As a result of the 20% reduction in transaction levy, trading in futures and option contracts also enjoyed reduced transaction costs. 4 HKEx Fact Book 2006

6 The Year 2006 in Review Trading activities The HKEx derivatives market recorded its most active year in The total trading volume of futures and options was million contracts, 68% more than the 2005 historical peak. The annual trading volumes in the HSI futures and options, Mini-HSI futures and options, H-shares Index futures and options, stock futures and stock options all reached new record highs. Among all futures products, HSI futures were the largest volume contributor (contributing 64% of total futures volume) and recorded an annual turnover increase of 28% to million contracts in 2006, with an open interest of 119,836 contracts at year end. The second largest volume contributor H-shares Index futures (contributing 25% of total futures volume) surged by 147% to 4.88 million contracts, with a year-end open interest of 59,345 contracts. The turnover of the Mini-HSI futures also grew by 43% to 2.14 million contracts in the year. The number of stock futures classes was 41, compared with 42 in 2005, and the annual trading volume jumped by 681% to 102,010 contracts. Stock options continued to be the most active options product, contributing 79% of total options contract volume in At the end of 2006, the number of stock option classes expanded to 47, with an open interest of 2.53 million contracts, comparing to 43 classes and an open interest of 1.02 million contracts at the end of The annual trading volume surged to million contracts in 2006, representing a year-on-year increase of 108%. The total premium for 2006 was HK$19.2 billion, up 85% from HK$10.4 billion in The second biggest volume contributor in the options market HSI options registered a year-on-year volume increase of 33% to 4.10 million contracts in The turnover of H-shares Index options recorded an increase of 195% to 758,247 contracts. Mini- HSI options recorded a volume of 53,456 contracts for the year, up 75% from Trading in the non-equity derivative products contracted further in 2006 the 1-month HIBOR futures decreased by 37% to 155 contracts, the 3-month HIBOR futures decreased by 44% to 13,888 contracts, and 3-year Exchange Fund Note futures recorded zero trading in HKEx Fact Book 2006

7 Major Events of the Hong Kong Securities and Derivatives Markets 2006 Major Events of the Hong Kong Securities and Derivatives Markets 2006 Month Event January On 6 January, amendments to the Securities and Futures Ordinance concerning the legal definitions of certain regulated activities became effective. The amendments include extending the definition of asset management to cover management of real estate investment trusts (REITs). February On 3 February, HKEx announced consultation conclusions to implement a new structure for listing decisionmaking in two phases. The first phase involved a number of rule amendments and addressed the size and composition of the Listing Committee and term for committee members. March On 6 March, HSI Services Limited adopted a freefloat-adjusted market capitalisation weighting with a cap of 15% for the H-share portion of each constituent company for calculating the Hang Seng China Enterprises Index (H-shares Index). On 20 March, HKEx announced the admission of the PRC National Council for Social Security Fund to the Central Clearing and Settlement System (CCASS) as a Corporate Investor Participant. On 31 March, the Securities and Futures Commission (SFC) announced that it would proceed with its proposed Six-Point Plan for the derivative warrants market after consultation, with refinements. The plan included enhancing investor education and information dissemination, banning commission rebates, facilitating further and identical issues, issuing new marketing guidelines, appointing external liquidity providers, and promoting the use of plain language. April On 26 April, HKEx announced the Grand Opening of the Exchange Trading and Exhibition Hall Complex. The Exhibition Hall opened to the public starting from 15 May. On 28 April, Mr Ronald Arculli was appointed the Chairman of HKEx to succeed Mr Charles Lee who retired after the Annual General Meeting of HKEx held on 26 April. May On 19 May, amendments to the Main Board and GEM Listing Rules regarding the term and composition of Listing Committees of the Main Board and GEM became effective. The number of Listing Committee members was expanded to at least 28 members including HKEx Chief Executive, at least 8 appointed investor representatives, and 19 appointed members. On 29 May, the Stock Exchange of Hong Kong (SEHK) increased the maximum number of outstanding orders per price queue from 4,000 to 8,000 in AMS/3. June On 5 June, HKSCC announced the expansion of the Investor Participant (IP) account service to Macau individual investor and companies. On 10 June, HKEx completed the second phase of its network consolidation project by migrating all CCASS/3 Participant network connections to SDNet, the next generation network of HKEx s securities and derivatives markets. As a result, the majority of Clearing Participants started enjoying cost savings. On 12 June, Callable Bull/Bear Contracts (CBBCs) began trading in HKEx securities market, with 7 CBBCs at launch. The aggregate turnover value on the first trading day was HK$14.91 million. 6 HKEx Fact Book 2006

8 Major Events of the Hong Kong Securities and Derivatives Markets 2006 Month Event On 23 June, the Securities and Futures (Amendment) Ordinance 2006, which provides for a separation of the role of the SFC s Chairman from its executive arm and for the creation of a CEO post, was gazetted. Mr. Martin Wheatley was appointed CEO and Mr. Eddy Fong was subsequently appointed chairman later in October July On 7 July, HKEx published the Exposure Conclusion on the Abolition of Requirement for Main Board Issuers to Publish Paid Announcements in Newspapers and Related Matters and the abolition will proceed in phases. On 12 July, HKEx published on its website a summary of the submissions on its GEM Discussion Paper which was released on 20 January On 13 July, the Financial Reporting Council (FRC) Bill was passed in the Legislative Council. The FRC will have the authority to investigate complains concerning standards of financial reporting and audits of listed companies. Chairman of the FRC was later appointed by the Government on 30 November. On 24 July, HKEx implemented the phase 2 reduction of minimum securities trading spreads. The minimum spread for securities trading between HK$2 and HK$10 was reduced to HK$0.01 and for those between HK$10 and HK$20 to HK$0.02. September On 5 September, the SFC released the Guidelines for Sponsors and Compliance Advisers, effective 1 January The guidelines cover the new eligibility criteria and on-going obligations for sponsors, among other things requiring sponsors to have sufficient expertise and resources, effective internal controls and management supervision, annual internal systems assessment and maintenance of proper and updated records. On 11 September, the Government held the Economic Summit on China s 11th Five-Year Plan and the Development of Hong Kong. Regarding financial services, three working groups were set up to study: (1) the listing rules and regulations in order to facilitate further development of the local equity market; (2) further development of foreign exchange, futures and commodities trading; and (3) further development of the insurance and reinsurance industries in Hong Kong and the Mainland. On 11 September, the number of constituent stocks in the Hang Seng Index (HSI) increased from 33 to 34, after the inclusion of China Construction Bank as the first H-share constituent. In addition, HSI Services Limited started switching the compilation of the HSI from a full market capitalisation weighted formula to a freefloat-adjusted market capitalisation weighted formula with a 15% cap on individual stock weightings. The changes would be phased in over one year. On 22 September, the SFC released Consultation Conclusions on the reform initiatives to the prospectus regime governing the public offering of shares and debentures in the Companies Ordinance. On 30 September, amendments to the Main Board Listing Rules in respect of structured products became effective. The amendments were made to implement the recommendations of the SFC s Six-Point Plan. They include permitting issuers to launch further issues and substantially identical issues subject to certain conditions and limitations, and prohibiting issuers from offering commission rebates or other incentives. 7 HKEx Fact Book 2006

9 Major Events of the Hong Kong Securities and Derivatives Markets 2006 Month Event October On 1 October, the SFC s Measures to Address Risks Arising from Securities Margin Financing took effect. The measures include: (1) introducing limits on repledging; (2) making some moderate changes to selected Financial Resources Rules (FRR) haircut percentages; (3) improving transparency by better disclosure; and (4) providing relaxation on certain requirements. On 1 October, the SFC Guidelines on Marketing Materials for Listed Structured Products took effect. The guidelines adopt a principle that marketing materials should not be false, biased, misleading or deceptive and should include appropriate risk warnings. On 24 October, HKEx announced Listing Rules amendments regarding the regulation of sponsors and compliance advisers, effective 1 January Under the amended rules, the SEHK permits a SFC-licensed or -registered firm to work as a sponsor or compliance adviser and no longer imposes additional initial and continuing eligibility criteria or sanctions sponsors or compliance advisers. On 27 October, Industrial and Commercial Bank of China (ICBC) was listed simultaneously in Hong Kong and Shanghai. It was the largest IPO by total funds raised (US$19.1.billion) in world stock market history and the funds raised by H shares was also an all-time high. November On 27 November, HSI Services Limited launched the Hang Seng China H-Financials Index (H-Fin Index), with initially eight constituents. December On 1 December, the transaction levy in respect of any trading in securities, futures or option contracts was reduced by 20% from 0.005% of transaction value per side to 0.004%, payable to the SFC. 8 HKEx Fact Book 2006

10 Market Highlights Main Board Stock market highlights Main Board Listed securities (as at year end) Year No. of listed companies Domestic (1) Foreign (2) No. of listed securities 1,971 2,448 3,184 No. of new listed companies Total issued capital (HK$mil) 431, , , Total market capitalisation (HK$mil) 6,629, ,113, ,248, Equity funds raised (HK$mil) 276, , , Trading No. of trading days Total turnover value (HK$mil) (3) Annual 3,948, ,498, ,332, Average daily 15, , , Total turnover volume (mil shs) Total number of trades (deals) Stock price indices Annual 3,984, ,733, ,431, Average daily 16, , , Annual 36,631,418 36,404,138 63,132,306 Average daily 147, , ,596 S&P/HKEx LargeCap Index (28 February 2003 = 10000) High Low Year-end Hang Seng Index (31 July 1964 = 100) Market ratios (4) High Low Year-end Average dividend yield (%) Average P/E ratio (times) Average book value ratio (times) Annual turnover velocity (%) Number of Exchange participants Notes: (1) All PRC incorporated enterprises with H shares listed on the Exchange are included. (2) A listed company would be counted as a foreign company if it is incorporated overseas and has a majority of its business outside Hong Kong and PRC, and as a domestic company if otherwise. (3) Turnover values have been adjusted for late reported and rejected sales. (4) Calculations are based on year-end figures of all listed stocks. 9 HKEx Fact Book 2006

11 Market Highlights Growth Enterprise Market (GEM) Stock market highlights Growth Enterprise Market (GEM) Listed securities (as at year end) Year No. of listed companies No. of listed securities No. of new listed companies Total issued capital (HK$mil) 9, , , Total market capitalisation (HK$mil) 66, , , Equity funds raised (HK$mil) 5, , , Trading No. of trading days Total turnover value (HK$mil) (1) Annual 25, , , Average daily Total turnover volume (mil shs) Total number of trades (deals) Stock price indice Annual 38, , , Average daily Annual 612, , ,735 Average daily 2,460 2,235 3,825 S&P/HKEx GEM Index (28 February 2003=1000) Market ratios (2) High Low Year-end Average dividend yield (%) Average P/E ratio (times) Average book value ratio (times) Annual turnover velocity (%) Notes: (1) Turnover values have been adjusted for late reported and rejected sales. (2) Calculations are based on year-end figures of GEM stocks. 10 HKEx Fact Book 2006

12 Market Highlights Main Board & GEM Stock market highlights Main Board and GEM Listed securities (as at year end) Year No. of listed companies ,037 1,096 1,135 1,173 Domestic (1) ,027 1,086 1,126 1,165 Foreign (2) No. of listed securities 1,212 1,349 1,189 1,586 1,785 2,176 2,649 3,383 No. of new listed companies Total issued capital (HK$bil) Total market capitalisation (HK$bil) 4, , , , , , , , Equity funds raised (HK$bil) Trading Initial public offers Secondary market No. of trading days Total turnover value (HK$bil) (3) Annual 1, , , , , , , , Average daily Total turnover volume (bil shs) Annual 1, , , , , , , , Average daily Total number of trades (deals) Annual 23,063,257 36,871,325 24,123,635 20,536,648 28,803,397 37,243,835 36,956,081 64,077,041 Average daily 93, ,277 99,274 83, , , , ,421 Market ratios (4) Average dividend yield (%) Average P/E ratio (times) Average book value ratio (times) Annual turnover velocity (%) Notes: (1) All PRC incorporated enterprises with H shares listed on the Exchange are included. (2) A listed company would be counted as a foreign company if it is incorporated overseas and has a majority of its business outside Hong Kong and PRC, and as a domestic company if otherwise. (3) Turnover values have been adjusted for late reported and rejected sales. (4) Calculations are based on year-end figures of all listed stocks on main board and GEM. 11 HKEx Fact Book 2006

13 Market Highlights Derivatives Market Derivatives market highlights Year All futures and options products (excluding stock options) No. of trading days Contract volume 14,017,860 16,800,614 24,778,562 Equity index products 13,939,321 16,761,114 24,662,509 Equity products 17,274 13, ,010 Interest rates products 61,265 26,431 14,043 Average daily 56,752 68, ,318 Open interest at the year end 245, , ,042 Equity index products 236, , ,250 Equity products 1,821 1,750 4,260 Interest rates products 6,600 1,477 1,532 Stock options No. of stock options classes at the year end No. of stock options series at the year end 2,560 3,146 3,756 No. of newly introduced stock options classes No. of trading days Contract volume Annual total 5,611,832 8,722,393 18,127,353 Average daily 22,720 35,385 73,390 Premium (HK$ Mil.) Annual total 5,581 10,370 19,242 Average daily Number of trades Annual total 150, , ,129 Average daily ,616 Open interest at the year end 684,052 1,021,913 2,533,807 Contracts exercised 898,498 1,351,208 2,605,289 Average premium per contract (HK$) 995 1,189 1,061 Average contract per trade (contracts) No. of market makers Put volume/call volume Average daily contract volume/open interest 3.3% 3.5% 2.9% Options volume (shares)/underlying stock volume 2.3% 3.2% 3.6% All futures and options products Contract volume 19,629,692 25,523,007 42,905,915 Open interest at the year end 929,213 1,387,259 3,028, HKEx Fact Book 2006

14 Market Highlights Clearing and Settlement Market Highlights Clearing and Settlement Year CCASS Statistics Average Daily Exchange Trades Handled by CCASS Number of trades 149, , ,417 Value of trades (HK$bil.) Share quantity Involved (bil. shs) Average Daily Settlement Instructions ( SIs ) Settled by CCASS Number of SIs 23,778 25,353 36,259 Value of SIs (HK$bil.) Share quantity involved (bil. shs) Average Daily Investor SIs ( ISIs ) Settled by CCASS Number of ISIs Value of ISIs (HK$mil.) Share quantity involved (mil. shs) Average Daily Settlement Efficiency of CNS Stock Positions on Due Day (T+2) (%) Average Daily Settlement Efficiency of CNS Stock Positions on the Day following the Due Day (T+3) (%) Average Daily Buy-ins Executed on T+3 Number of brokers involved Number of buy-ins Value of buy-ins (HK$mil) Shares Deposited in the CCASS Depository Number of shares (bil. shs) 1, , ,657.6 Percentage of total issued shares of the admitted securities Value of shares (HK$bil) 2, , ,754.9 Percentage of the total market capitalisation of the admitted securities DCASS Statistics Open Interest as at the year end (contracts) Equity Index Futures 150, , ,262 Stock Futures 1,821 1,750 4,260 Interest Rates Futures 6,600 1,477 1,532 Equity Index Options 86, , ,988 Stock Options 684,052 1,021,913 2,533,807 Cumulative Stock Options Exercised Share quantity involved (mil. shs) 696 1,213 2,303 Value of shares (HK$bil.) Note: Stock transactions in foreign currencies are excluded from the CCASS Statistics. 13 HKEx Fact Book 2006

15 S&P/HKEx LargeCap Index, weekly movement ( ) Index HK$Mil 300, , , , , (25/03/98) (13/08/98) (28/03/00) (21/09/01) (17/05/02) (25/04/03) (27/02/04) (17/05/04) (15/08/05) (04/05/06) Weekly Turnover Value (28/12/06) (14/06/06) 278, Securities Market Main Board Market Indices 50, Hang Seng Index, monthly movement ( ) Index (07/08/97) (28/03/00) (29/12/06) (04/01/94) INDEX (31/07/1964=100) (10/10/02) (01/10/87) (23/01/95) (13/08/98) (09/03/73) (10/12/74) (17/07/81) (07/12/87) HKEx Fact Book 2006

16 S&P/HKEx LargeCap Index, daily closing (2006) 28 February 2003 = Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Securities Market Main Board Market Indices S&P/HKEx LargeCap Index, daily movement (2006) Index (28/12) (03/01) /06 02/06 03/06 04/06 05/06 06/06 07/06 08/06 09/06 10/06 11/06 12/06 Daily Movement 10 MAV 50 MAV 15 HKEx Fact Book 2006

17 Hang Seng Index, daily closing (2006) 31 July 1964 = 100 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Securities Market Main Board Market Indices Note : HSI is compiled by HSI Services Ltd. Hang Seng Composite Index, daily closing (2006) 3 January 2000 = 2000 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Note : HSCI is compiled by HSI Services Ltd. 16 HKEx Fact Book 2006

18 Hang Seng Hong Kong Composite Index, daily closing (2006) 3 January 2000 = 2000 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Securities Market Main Board Market Indices Note : HSHKCI is compiled by HSI Services Ltd. Hang Seng Mainland Composite Index, daily closing (2006) 3 January 2000 = 2000 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Note : HSMLCI is compiled by HSI Services Ltd. 17 HKEx Fact Book 2006

19 Hang Seng China Enterprises Index, daily closing (2006) 3 January 2000 = 2000 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Securities Market Main Board Market Indices Note : HSCEI is compiled by HSI Services Ltd. Hang Seng China-Affiliated Corporations Index, daily closing (2006) 3 January 2000 = 2000 Date Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec High Low Avg Note : HSCCI is compiled by HSI Services Ltd. 18 HKEx Fact Book 2006