Hong Kong is the world's 11th largest trading economy, one of the world's four largest gold markets, the world's 6th largest foreign Exchange market, the world's 15th largest banking centre, and Asia's 2nd biggest stock market. Banking transactions Volume are among the highest in the world in 2006.Hong Kong has 202 foreign-owned licensed banks, restricted licence banks, Deposit-taking companies and representative offices from 30 countries as at end of 2006. There are 181 foreign banks in Hong Kong with 69 of the world's top 100 banks are present in Hong Kong.
The rule of law upheld by an independent judiciary, free flow of capital and information, a simple and Low Tax regime, and a broad and deep Pool of talents with extensive international experience that are best suited to the Hong Kong and the Mainland markets and Asia, as well as having a very broad and deep international outlook are their strengths. Hong Kong has been ranked by the Heritage Foundation as the world's freest economy for 13 consecutive years and also the second most preferred destination for foreign investment in Asia for five consecutive years by the United Nations World Investment Report 2006.The absence of any restrictions on capital flows into and out of Hong Kong is another important strength.
Trading in Exchange Fund Bills and Notes was active with an average daily turnover of HK$36.3 billion in the first nine months of 2006.The Stock Market is the 2nd largest in Asia behind Japan. At the end of December 2007, 1,241 public companies were listed on the Stock Exchange of Hong Kong Limited with a total market capitalization of HK$20,697.54 billion (US$2,654 billion). They have a vibrant Capital Market and a sound banking system, with around 70 of the world's top 100 banks operating in the city. Asset-management business has also been expanding rapidly with total assets under management exceeding US$580 billion at the end of 2005. The insurance sector, NOW served by around 180 insurers from around the globe, has also been registering double-digit growth every year in the past decade.
Hong Kong maintains a three-tier system of Deposit-taking institutions, comprising licensed banks, restricted license bank (RLBs) and Deposit-taking companies (DTCs). Only licensed banks may operate current and savings accounts and accept deposits of any size and maturity. Subject to various restrictions, RLBs and DTCs are two categories of institutions which provide an opportunity for overseas banks not qualified for a full banking license to conduct wholesale and investment banking business in Hong Kong.
As Hong Kong is an international financial center, it is the firm commitment of the Hong Kong Monetary Authority that the supervisory framework in Hong Kong should conform with international supervisory standards, e.g. all authorized institutions are required to comply with a minimum Liquidity ratio of 25%, locally incorporated institutions have to comply with a minimum capital adequacy ratio of 8% and the HKMA may raise the ratio to 12% in case of licensed banks and 16% in the case of RLBs or DTCs. At present, the minimum ratio for locally incorporated banks is 10%. Hong Kong also has a mature and active foreign Exchange market, which forms an integral part of the global market. The link with overseas centres enables foreign Exchange dealings to continue 24 hours a day with the rest of the world. The Hong Kong fund industry is characterised by its strong international flavour, both in terms of the presence of global fund managers and authorised funds.
Last year,stock market raised over US$42 billion through IPOs, which made Hong Kong the second largest IPO fund-raiser worldwide. The market capitalisation of stock market has also quadrupled in the past decade to reach US$1.8 trillion, which makes us currently the second largest in Asia and the 8th largest in the world.
Hong Kong continues to be one of the most Open insurance centres in the world. Among the 195 authorised insurers at year-end, 99 were insurers from 25 overseas countries or the Mainland. Eleven of the world's top 20 insurers are authorised to carry out insurance business in Hong Kong either directly or through a group company. There are 27 professional reinsurers, including most of the top reinsurers in the world.