Stock Index Futures Launch in China

Updated: 2010-04-16 09:41
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Editor's Note:

The Shanghai-based China Financial Futures Exchange launched the country's first stock index futures on April 16. It marks a milestone in making China's financial markets more professional and less speculative. If all goes smoothly, it could pave the way for the gradual introduction of a range of other derivatives and products, from options to global exchange-traded funds, that will be needed to realise the goal of building Shanghai into a global financial centre by 2020. [Factbox about Index Futures][Related Special Coverage][Share Your Thoughts]


Trading Starts

Stock Index Futures Launch in China

China sets launch value for index futures contracts

The China Financial Futures Exchange on Thursday, April 15 set the base value for the kick-off of trade in China's first stock index futures contracts, due for official launch on Friday, at 3,399 points for all four contracts.

The contracts are for May, June, September and December. [Full Story]

Futures likely to be pricey, Goldman Sachs says

China's stock-index futures will begin trading on Friday, April 16 at the "expensive side of fair value" as volumes will be limited, Goldman Sachs Group Inc said.

"Under close monitoring by authorities, we expect a gradual increase in liquidity, but even then we do not expect a significant direct impact on the stock market," Christopher Eoyang and Jason Lui, analysts at Goldman Sachs, wrote in a report on Thursday. [Full Story

Launch Ceremony

Stock Index Futures Launch in China

Shang Fulin, chairman of the China Securities Regulatory Commission, speaks at the launching ceremony of the stock index futures in Shanghai, April 8, 2010. [Xinhua]

China unveils stock index futures in Shanghai

A ceremony was held Thursday in Shanghai to mark the debut of stock index futures on the Chinese mainland, which observers believe was a step forward in Shanghai's efforts to develop itself into a risk management center for the whole Asia-Pacific region.

Official trading in the stock index futures, which is the first financial futures product on the mainland, will begin in eight days at the China Financial Futures Exchange in Pudong of Shanghai. [Full Story]

US expert calls China's index futures launch historic

CHICAGO - The upcoming launch of China's index futures is a historic move that represents a giant step by China towards a market-driven economy, said the founder of financial futures.

"I think the Chinese officials have done extremely well in preparing for the market," said Leo Melamed, the globally recognized founder of financial futures. [Full Story]

Investors keen on new index futures

The new kid on the futures block seems to have got off to a great start, going by the early responses from investors.

For many like Yao Shanliang, a 63-year-old retired metal trader, the opportunity to trade in stock index futures was something that they did wish to slip out of their hands. [Full Story]

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Index futures contracts on the way

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China launches stock index futures trading accounts

China approves final rules for index futures

China finalizes high thresholds for index futures

Index futures tweaked to curb trading risks

CSRC unveils draft rules for index futures investment

China OKs exchange to launch index futures

China approves index futures

Foreign Investors

Index futures trading rules for foreigners underway

Chinese authorities are making policies that would give overseas investors access to China's stock index futures trading, said a senior trader.

Overseas investors would be able to engage in the stock index futures trading under the status of Qualified Foreign Institutional Investors (QFII), said Zhu Yuchen, general manager of the China Financial Futures Exchange and a deputy to the 11th National People's Congress. [Full Story]

Swiss firm eyes index futures pie

Stock Index Futures Launch in China

UBS AG, which holds the largest investment quota of $800 million under the Qualified Foreign Institutional Investor (QFII) system in China, said on Jan 18 it would trade China's new stock index futures.

"Regulations have made it clear that QFIIs will be allowed to take part in index futures by putting up a certain portion of their QFII quota and we hope to participate in the new financial tool to manage risks," said Nicole Yuen, head of China Equities at UBS. [Full Story]


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Regulator ironing out nitty-gritties

Index futures on deck for foreign investors

Index futures benefits foreign investors


Opinion & Analysis

Index futures launch a milestone for China reforms

China's launch of trading in stock index futures on Friday will mark a milestone in making its financial markets more professional and less speculative, even though they are likely to get off to a slow start.

By making it possible for investors to short the market or bet on a rise against the tide, futures, together with other reforms such as a pilot programme on short selling of stocks, should ease the Chinese market's volatility.

If all goes smoothly, it could pave the way for the gradual introduction of a range of other derivatives and products, from options to global exchange-traded funds, that will be needed to realise the goal of building Shanghai into a global financial centre by 2020. [Full Story]

China index futures may tame asset bubbles, Macquarie says

China's stock-index futures will allow investors to hedge risks from potential asset bubbles and make equities cheaper in the long-term, according to Macquarie Group Ltd, Australia's largest investment bank. [Full Story]

Index futures not for faint-hearted

Small Chinese stock market punters are no doubt overjoyed to see index futures and other derivative products added to their box of investment tools, but riskier avenues heighten the perils of losing money as well as making it. [Full Story]

China's 'big step' on futures to boost investment

China took a big step toward opening its capital markets by approving stock index futures, paving the way for increased investment in the world's fastest-growing major economy, according to Invesco Ltd. [Full Story]

Stock Index Futures Launch in China


Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences

Index futures may trigger falls in small equities, says CICC

China's smallest stocks are poised to fall as the government's approval of index futures prompt investors to switch to larger equities that are half as expensive, according to China International Capital Corp (CICC). [Full Story]

Stock market facing vital changes

Despite receiving varied market responses, the planned launches of index futures as well as margin trading are expected to tremendously influence the Chinese stock market, which has drastically fluctuated over the past two years. Launching the two moves also shows that the domestic securities market is taking a big mature step forward.[Full Story]

Blue chips, others to benefit from index futures

The planned stock index futures (SIF) will benefit the brokerage shares, blue chips, shares of companies linked to index futures trading, and close-end funds, according to the semimonthly business journal Chinese Entrepreneurs.[Full Story]


Market Reform & Innovation


China begins margin trading trial

China launched its margin trading and short selling trial program on March 31 on the Shanghai and Shenzhen stock exchanges after four years of preparation. [Full Story]

Draft norms for overseas listings in Shanghai soon

Stock Index Futures Launch in China

The Shanghai Stock Exchange has completed the draft listing and trading rules of its international board which will allow overseas companies to float shares in China's A-share market, Geng Liang, the exchange's chairman, said.

"The draft rules are completed but we are still working on the details. They are still subject to change and the revised rules will be available for public comment soon," Geng said at a press conference on the sidelines of the annual National People's Congress session in Beijing. [Full Story][China's foreign ETF plan signals market reform]

China mulling mini index futures

China Financial Futures Exchange will introduce mini-sized contracts for stock index futures to rope in more retail investors after the smooth launch of the new financial instrument, Zhu Yuchen, the general manager of the bourse, said. [Full story

Shanghai to get container derivatives mart

Stock Index Futures Launch in China

Shanghai Shipping Exchange, based in China's busiest port, intends to set up a container-shipping derivatives market by year-end as the city tries to challenge London as a global center for shipping finance.

The forward freight agreements, or FFAs, which help guard against fluctuations in shipping rates, will be targeted at small- and medium-sized exporters, who don't have the volumes needed for long-term shipping contracts, said Yao Weifu, a director at the shipping exchange. The plan is awaiting government approval. [Full Story]

China launches NASDAQ-style board for start-ups

China's NASDAQ-style market, ChiNext, which is based in Shenzhen and started trading on Oct 30, 2009, is tailored to the needs of enterprises engaged in independent innovation and other enterprises with great growth potential. Currently, there are 66 stocks trading at the start-up board. [Special Coverage]