THE chairman of Hongkong Futures Exchange has denied that Hang Seng Index Futures are being manipulated by major players.
Chairman Mr Leong Ka-chai said supervision provided by the compliance division was enough to prevent market manipulation. Some small-to medium-sized futures brokerage firms have claimed that institutional influence is possible.
The index futures market has turned active in the last few months as the Sino-British row intensified with Governor Chris Patten's reform proposals last October.
''Given the trading of several billion dollars a day, there is correlation between the stockmarket and the futures market. As such, manipulation on both markets by a gang of people is quite impossible,'' said Mr Leong.
According to Hongkong Futures Exchange director Mr Fung Chi-kin, the market is not as fantastic as some columnists make it out to be. ''I don't think the big institutions can be so powerful. The market has turned volatile because of the heated political situation;, it has nothing to do with manipulation,'' he said.
Mr Fung pointed out that the futures market had remained quiet after the 1987 crash until recently. With more players there was more demand, he said.
