Hong Kong’s stock exchange on Monday launched the trading of 10 MSCI Index futures contracts tracking stocks from across Asia-Pacific markets, as the bourse seeks to cement its position as a leading global financial hub.
The launch of the 10 derivative products, denominated in US dollars, is the first as part of an agreement struck between bourse operator Hong Kong Exchanges and Clearing (HKEX) and MSCI in May, which allowed the exchange to offer futures contracts and options on the 37 equity gauges owned by the New York-based index compiler.
“Today’s listing marks an exciting new chapter for HKEX and our markets, as we provide even more choice to our customers, and continue to build the breadth, depth and attractiveness of Hong Kong’s financial markets as a global trading and investment hub,” said Wilfred Yiu, head of markets at HKEX.
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“This will bring enhanced liquidity to our markets and greatly complement our existing product suite.”
The 10 contracts are linked to indices covering stocks in China, Australia, India, Indonesia, Japan, Malaysia, Taiwan and Thailand.
However, mainland investors are not able to trade these derivatives via the Stock Connect programme currently.
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HKEX was picked to offer the contracts over Singapore Exchange, as the city’s bourse manages to woo more investors after the launch of the Stock Connect programme and the reform of listing rules that allow stock offerings by more technology companies.
The Singapore Exchange, which has had a 23-year partnership with MSCI, retains no more than two dozen futures contracts.
Shares of HKEX rose 2.3 per cent to a record high of HK$353.20 on Monday. Investors have ramped up the stock in anticipation of the bourse operator benefiting from the forthcoming secondary offerings of Chinese companies trading in the US amid escalating hostility between Beijing and Washington.
E-commerce platform JD.com and gaming company NetEase both started trading in Hong Kong last month, marking the start of the return of the group of Chinese companies with a combined market cap of about US$1.2 trillion.
Another 23 futures contracts on the MSCI Index tracking stocks from the Philippines to Vietnam will start trading on July 20 and in August, with another four still subject to regulatory approval, according to HKEX.
MSCI’s stock indices are tracked by investors holding more than US$13 trillion of assets worldwide.
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