YET more products will be launched by the Hong Kong Futures Exchange in the coming year, following a buoyant 1994 when turnover soared. This surge in business reflected restored confidence in the bourse and growing understanding of how to use products to make money, according to chairman Leong Ka-chai. Turnover has topped 1987 levels for the first time since the stock market crash of Black Monday, October 19, 1987, and total trades so far this year are 70 per cent higher than 1993. Turnover records were shattered in October and November. On October 25, there were 42,438 futures lots traded against the previous record of 40,147 lots on September 11, 1987. Index options had record turnover on November 23 when 8,949 changed hands. The previous highest total was 6,127 lots on October 15, 1987. Record open interest on the exchange for the year came on September 29 when 45,345 futures contracts were open. The high for 1993 was 45,877 on December 13. The highest open interest for options came September 28 when 57,252 contracts were open. The previous high was 41,369 on December 29, 1993. The turnover will allow the launch of further new products sooner than expected, Mr Leong said. 'We hope to introduce futures on currencies in the first half of next year,' he said. 'The high turnover on the exchange is the reason we can afford to develop these new products. 'Two or three years ago, we talked about currency futures but we couldn't even afford to sit down and work out the details; there was no budget.' But following a rise in turnover on the Futures Exchange from 2.42 million lots in 1993 to 4.03 million for the year to the middle of December, a 70 per cent increase, the exchange is finding its coffers bulging and public confidence in its operations and management fully restored, Mr Leong said. The Exchange receives $950 per side per transaction. The Exchange cannot only fund a research team now but it is also buying a new trading and clearing system which can handle both futures and options. 'It is an open architecture and very modular, we could also connect to Exchanges in Stockholm and London,' he said, but refused to reveal if any concrete plans on links to other exchanges existed. Mr Leong said the currency products would all be based on the US dollar cross rate with other currencies initially. 'We will start with three or four of the most common trades, like the dollar against the British pound, deutschemark and Japanese yen,' Mr Leong said. With the Securities and Futures Commission now regulating foreign exchange traders the contracts could generate a great deal of interest, Mr Leong said. Some of the traders are also Futures Exchange members, he said. 'Actually, the risk is less trading currencies this way because it is an exchange traded product and you don't have to worry about counter-party risk,' he said. He said the Futures Exchange would also be interested in talking to the Economic Services Branch, the SFC and other relevant bodies on forex trading companies hedging risk on the Futures Exchange currency contracts. 'From our point of view, we only look at our members, not the deals they have done elsewhere so the accounting treatment is different,' he said. 'For them to be allowed to hedge risk, it would require further talks.' Mr Leong said he was also pleased by how Hang Seng Index Options had taken root. The total turnover was 588,189 lots compared with 295,217 from the launch of options on March 5, 1993 until the end of 1993. 'Investors are more familiar with the market tools,' he said.