Product Descriptions 
26/06/2013 
 
 

Growing BRICS Markets

BRICS (Brazil, Russia, India, China and South Africa) countries have become vital sources of growth in the global economy. From 2000 to 2010, the GDP growth of BRICS countries significantly outperformed the rest of the world.

 

BRICS Exchanges Alliance

HKEx, BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BVMF) from Brazil, Open Joint Stock Company "Moscow Exchange MICEX-RTS" (Moscow Exchange) from Russia, BSE Ltd. (BSE) from India, and JSE Ltd. (JSE) from South Africa formed an exchange alliance in 2012, cementing closer cooperation among BRICS exchanges.   The alliance enables members to expand their product offerings beyond their home markets and gives investors exposure and easier access to the dynamic and emerging BRICS economies.

 

BRICS Exchanges’ Benchmark Index Futures at HKEx

The listing of benchmark equity index derivatives on the boards of each of the alliance members marks the first phase of cooperation.  The introduction of BRICS Exchanges’ benchmark index futures to HKEx’s marketplace will diversify HKEx’s product offerings, giving investors further access to emerging BRICS markets.  Under the alliance, the following benchmark equity index futures will be listed on the Hong Kong Futures Exchange Ltd (HKFE), a wholly-owned subsidiary of HKEx:

Brazil’s IBOVESPA futures;

Russia’s MICEX Index futures;

India’s S&P BSE SENSEX Index futures; and

South Africa’s FTSE/JSE Top40 futures.

 

HKEx’s Stock Index Futures on BRICS Markets

HKEx’s stock index futures on BRICS benchmark indices are contracts listed and traded on HKFE.  They are cash settled futures contracts traded in HKD; the trading hours and holiday schedule follow HKFE’s existing market practice.  The contract design enables convergence with home market contracts in terms of last trading day and final settlement price to facilitate hedging and arbitrage. 

 

Advantages of Trading BRICS Exchanges’ Benchmark Index Futures at HKEx

The trading opportunities with BRICS Exchanges’ benchmark index futures contracts at HKEx are as follows:

Easy to Gain Exposure to BRICS Markets

Asian investors can easily gain exposure to the BRICS markets using HKD in an Asian time zone.

Effective Hedging Tool

Investors can manage their risk exposure in BRICS market related products (such as stock portfolios, ETFs, investment funds and structured products).

Cross-market Arbitrage Opportunities

Traders may explore cross market arbitrage opportunities between HKEx and their home markets.

High Cost-effectiveness

HKEx’s futures contracts are cost-effective and leveraged tools for investors.

Low Counterparty Risk

Counterparty risk can be reduced by the HKFE Clearing Corporation Limited, an HKEx subsidiary which acts as a central counterparty to every trade.

 

 

Quick links to BRICS Exchanges

BRICS Exchanges’ benchmark index

The Underlying Exchange

Index Information

Brazil

 

BM&FBOVESPA

http://www.bmfbovespa.com.br/en-us/home.aspx?idioma=en-us

IBOVESPA

http://www.bmfbovespa.com.br/indices/ResumoIndice.aspx?Indice=IBOVESPA&Idioma=en-US

Russia

 

Moscow Exchange

http://rts.micex.ru/en/

MICEX

http://www.micex.com/marketdata/indices/shares/composite#&index=MICEXINDEXCF

India

 

BSE

http://www.bseindia.com/

S&P BSE SENSEX Index

http://www.bseindia.com/about/abindices/preface.asp

South Africa

 

Johannesburg Stock Exchange

www.jse.co.za/brics

FTSE/JSE Top40 Index

www.jse.co.za/brics