Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce new stock index futures and stock futures on three A-share Exchange Traded Funds (ETFs) as part of its continuing efforts to expand its suite of Mainland China-related products.
CES 120 futures
CES China 120 Index (CES 120) futures will be introduced on Monday, 8 July 2013, subject to regulatory approval.
The CES 120 was developed by China Exchanges Services Company Limited (CESC), a joint venture of HKEx, the Shanghai Stock Exchange and the Shenzhen Stock Exchange, to track the performance of the largest and most liquid China stocks listed in Mainland China and Hong Kong.
The CES 120 futures contract will be the world's first exchange-listed derivatives product designed to provide a convenient, cost efficient and simultaneous exposure to leading China stocks from the Mainland and Hong Kong markets through a single exchange-traded futures contract that can be used for trading or hedging purposes. The contract would also serve as an effective risk management tool for institutions and investors with the China-related equity portfolios, including Exchange Traded Fund (ETF) market makers, to hedge their positions in China-related ETFs.
Key features of CES 120 futures’ contract specifications comprise:
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Contract Multiplier: |
$50 per whole index point
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Minimum Fluctuation:
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0.5 index point (or $25)
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Contract Months: |
Spot month, the next calendar month and the next two calendar quarter months (calendar quarter months are March, June, September and December)
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Trading Hours: |
9:15 am – 12 noon and 1 pm – 4:15 pm
(Hong Kong time, or HKT), except on Last Trading Day, or LTD.
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Trading Hours on LTD: |
9:15 am – 12 noon and 1 pm – 3:00 pm (HKT)
Note: No afternoon trading on Christmas Eve, New Year’s Eve or Lunar New Year’s Eve.
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Holiday Schedule: |
Hong Kong holiday schedule
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Liquidity Providers: |
HKEx has invited applications from Futures Exchange Participants interested in being liquidity providers for CES 120 futures.
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(Contract specifications are attached below along with other additional information.)
"CES 120 futures will be the first exchange-traded futures on an index that includes A shares as well as H shares, red chips and other Hong Kong-listed shares of Mainland companies," said HKEx Chief Executive Charles Li. “The launch of CES 120 futures will be a milestone in our equity derivatives strategy of building on our current business and offering an extensive product suite across Hong Kong and Mainland underlying securities."
"We will continue working with our CESC joint venture to offer a suite of products with underlying China-related securities and rolling out cross-market and A share-related products based on CESC indices," Mr Li said. "HKEx is committed to offering a variety of products to our customers and relevant risk management tools for their portfolio management requirements."
Stock futures on 3 A-share ETFs
Stock futures on the CSOP FTSE China A50 ETF, iShares FTSE A50 China Index ETF and China AMC CSI 300 index ETF will be introduced on Monday, 10 June 2013, subject to regulatory approval. Some of the stock futures' key features are shown in the table below.
The rollout of the three new stock futures contracts will give HKEx its first stock futures on A-share ETFs, the contracts will provide investors with more choice in Mainland-related equity derivatives, and they will complement HKEx’s stock options on the three A-share ETFs as well as the ETFs themselves.
Contract Specifications of CES China 120 Index Futures
The following Contract Specifications shall apply to the CES China 120 Index Futures Contract: