HONG KONG must have active short selling and trading of options on stocks or risk losing even more business to other exchanges, a stock exchange official has warned.
Executive director Paul Phenix told the Pan-Asia Securities Lending Congress yesterday that restrictive regulations had stalled stock-lending activity in Hong Kong and moved the business to offshore markets.
He said there were some estimates that the total amount of open positions on Hong Kong stocks had reached US$3 billion, creating a serious threat to the market's short selling and options projects.
''One of the reasons so much of our stock is traded in London is that it is a financial supermarket,'' Mr Phenix said.
''The biggest plus we have is liquidity but this is improving in London. On good days they are doing 18 per cent of what we do on the Hong Kong stocks listed in London,'' he said.
This competitive environment has created a sense of urgency for the stock exchange to launch short selling as soon as possible.
