Options trading remains listless

OPTIONS and futures trading continued to be modest despite the large gains made by shares.

Jardine Fleming head of derivatives research Virginia Mumford said: ''Investors are waiting to see where the market settles before wading into the options market.'' Reaction to the China-US textile trade agreement and hopes of good results from the Bank of East Asia pushed January futures above 11,000 in both morning and afternoon trading.

Jardine Fleming said: ''Overseas selling above 11,000 caused a temporary halt but further buying saw the future end the morning session at 11,210, a 51-point premium on the cash market.'' Despite the good results from Bank of East Asia, whose earnings were up 46 per cent to more than $1 billion, overseas profit-taking continued.

The future closed at 11,000, a 17-point discount to the cash market.

Turnover was 17,476 contracts, worth $9.56 billion. The estimated open interest for January stood at 25,285, for February, 1,974 contracts.

The February contract closed at 11,085, a premium to the cash market of 68 points.

Peregrine's Suni Goonetillake continued to push the broker's ''buy banks'' story. The broker believes that a re-rating of the banking sector is long overdue, and that the better-than-expected results from Bank of East Asia could be repeated elsewhere, including at Hang Seng Bank and HSBC.