Funds raised on the Hong Kong stock market have plummeted 88 per cent this year, making it the worst year for equity issues since the Asian financial crisis. Amid poor market sentiment in the global economic downturn, total capital raised reached only HK$57.7 billion by December 14, down from HK$467.3 billion last year. Average daily turnover shrank by 33 per cent to HK$8.17 billion, down from HK$12.33 billion last year, Hong Kong Exchanges and Clearing said yesterday. HKEx chief executive Kwong Ki-chi blamed the poor investor mood for the quiet year, which has seen the Hang Seng Index drop 24 per cent in the year to date. The market was hit by the postponement of two big issues in the second half: the listing of Bank of China (Hong Kong) and a secondary listing by London-based Standard Chartered. The Hong Kong market had a record year last year, helped by flotations of several large mainland companies, including telecommunications concern China Unicom and oil firm Sinopec. 'We had an exceptionally good year in 2000. It makes this year look poor, but actually it was only back to the normal level of the market,' Mr Kwong said. He believed China's entry into the World Trade Organisation would drive a rebound in fund-raising activities next year. 'With China's entry into the WTO, many mainland enterprises will need to raise funds to strengthen themselves in preparation for competition with foreign firms,' he said. 'This will increase the demand for mainland companies to raise funds in the SAR market.' Mr Kwong said he was not unduly concerned by the possibility of mainland companies listing on the domestic markets in Shanghai or Shenzhen instead. Mainland-listed companies could raise funds only in yuan and not place shares to many international investors, he said. 'For the companies which want to raise funds in Hong Kong dollars or for those which want to have a wider access to international investors, Hong Kong will be their first choice,' he said. Of the capital raised by December 14, HK$23.8 billion was raised by new listings, with the remainder accounted for by share placements and rights issues by existing listed companies. HKEx said more companies would be listed in the next 10 days. At the end of this year, there would be 89 new listed companies, with 31 on the main board and the rest on the Growth Enterprise Market. This would bring the total number of listed companies to 756 on the main board and 112 on the GEM. For the year to December 14, Hang Seng Index futures turnover was 4.23 million contracted trades, up 5 per cent from a year ago. Mr Kwong said HKEx would introduce new products and lengthen trading hours to boost turnover. The exchange is due to announce in the first quarter whether it will extend trading hours. It has suggested expanding trading hours to 11 hours from four at present, although it is widely expected to drop its proposal for an evening session following widespread market opposition. The proposed trading times are from 10am to 6pm, and 8pm to 11pm. At present, a trading day runs from 10am to 12.30pm, and from 2.30pm to 4pm. Mr Kwong said HKEx would consult the market on proposed changes in the listing rules and corporate governance regulations early next year. It would study whether to move forward with a proposal to allow companies to make announcements by issuing a press release on the HKEx Web site instead of placing newspaper advertisements. Mr Kwong said the withdrawal of 2Cube Securities and Charles Schwab from the online broking market might reflect the different investor needs in Hong Kong and the United States. He said Hong Kong investors found it easy to visit brokers' branches or contact them by telephone. This had discouraged online trading.