HONG KONG'S capital market issues soared to almost $55 billion last year, up 285 per cent on 1993, according to Asian credits newsletter basis point. Most of the action was in floating-rate issues, after the United States Federal Reserve effectively punctured the bond market with the first in a series of interest rate increases last February. Floating-rate issues were up 850 per cent on 1993. In stark contrast to earlier years, fixed-rate issues represented barely a quarter of the $54.39 billion in capital market issues. Floating-rate instruments totalled $39.8 billion, against only $4.2 billion in 1993, the newsletter said. US investment banks were on the fringes of the action, failing to penetrate the market and only Merrill Lynch made it into the top five of capital market issues. HSBC Markets again showed a clean pair of heels to the opposition, taking 20 per cent of the total fixed-and floating-rate market, but Dutch banking agent ABN-AMRO Bank pushed into third position on the strength of two large floating-rate note (FRN) issues. In the combined fixed-and floating-rate table, HSBC Markets did 40 deals for a total of $11.04 billion, the newsletter said. Second was Schroders Asia, with 16.3 deals totalling $8.17 billion. ABN-AMRO took third place with $5.3 billion, aided by FRNs for Wharf (Holdings) and Sun Hung Kai Properties. Fourth and fifth were Standard Chartered Markets and Merrill Lynch, with $4.96 billion and $3.05 billion respectively. The newsletter said the amount of fixed-rate issuance was remarkably high, given the interest rate increases in the United States 'and is an encouraging indicator of the established nature of the market'. 'But it is the floating-rate market which really developed in 1994,' it said. 'The regular issuers of FRCDs (floating-rate certificates of deposit), the smaller local banks and finance companies, continued to borrow but generally for larger amounts. HSBC Markets topped the floating-rate table, with seven deals totalling $8.3 billion, to capture 20 per cent of the market, followed by Schroders with $7.9 billion and ABN-AMRO with $5.3 billion. Fourth and fifth were Standard Chartered with $4.25 billion and Goldman Sachs Asia with $2.5 billion. In the fixed-rate league table, HSBC Markets had 19 per cent of the market, or $2.74 billion, followed by Union Bank of Switzerland with $2.05 billion and Oakreed Financial Services with $1.9 billion. Fourth and fifth were J P Morgan Securities Asia and Merrill Lynch with $1.41 billion and $1 billion of fixed-rate deals, respectively. Major foreign banks such as BoT and Fuji Bank also issued Hong Kong dollar FRCDs, said the newsletter, observing that 1994 was something of a watershed for corporate debt. 'Another significant trend to emerge was that for the first time local corporations began issuing FRNs in Hong Kong dollars: Sun Hung Kai Properties issued twice, raising $3.65 billion, while other issuers included Sino Land, DBS Land, Wheelock and Co and Wharf,' basis point said. Last year was also notable for the development of the mortgage-backed securities (MBS) market, it said, with Hong Kong corporates, and US and local banks securitising housing loans. Some novel structured issues such as corridor notes were also issued and the newsletter predicted more of the same this year. The first week of the year had already seen $630 million worth of fixed-rate issues and $2.2 billion worth of FRCDs, it said. It expected further issues by local and foreign banks fearful of a possible capital squeeze caused by the airport financing.