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.
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.