Remarks for H-shares Index Futures Media Conference
By
Mr Patrick Conroy
Chief Operating Officer, Hong Kong Exchanges and Clearing Limited
Good afternoon ladies and gentlemen and welcome.
I see some familiar faces here today. But for those of you who dont know me, I'm Patrick Conroy, or, and I've recently joined HKEx as its Chief Operating Officer.
Joining me today to introduce H-shares Index Futures are Deputy Chief Operating Officer Lawrence Fok and Exchange Business Unit Vice President, Calvin Tai.
As in the past, derivatives are likely to continue to be an important growth area for us. Our derivatives markets, including warrants, represent some of the most liquid and diverse in the world. Our Hang Seng Index products are a globally recognised brand, and provide a solid foundation for future market development initiatives. In addition, HKEx is extremely well-positioned to take advantage of future opportunities in the China markets and China-related financial products.
Today, I am pleased to announce that we will introduce a new China-related product on Monday, December 8thwhen H-shares Index Futures will commence trading.
The H-shares Index Futures contract is based on the Hang Seng China Enterprises Index (Index), which is compiled and calculated by HSI Services Limited to track the performance of major H shares.
The Index currently comprises 32 major Main Board-listed H-share companies with a combined market capitalisation of $236 billion, and during the period January through September, outperformed the Hang Seng Index by more than 40 percentage points.
The first H share was listed in Hong Kong in July 1993. Since then, H-share companies have raised more than $150 billion through IPOs. Today H shares play an important role in the Hong Kong securities market. In the first nine months of this year, H shares accounted for approximately 17 per cent of the Hong Kong securities market's daily turnover value.
As the Mainland economy continues to expand rapidly, there is growing interest among institutional investors and individuals in China-related products. As a result, we are looking to offer more products to meet the needs of those investors. H-shares Index Futures are one such product. In addition to representing an effective hedging mechanism, H-shares Index Futures will provide excellent opportunities for investors to benefit from movements in the prices of H-shares.
We believe that the H-shares Index Futures contract has great potential.
It is important, however, to take a long-term view when introducing any new financial product.
New products often take some time to develop. As such, at this time we do not have any specific volume or open interest targets in mind for H-shares Index Futures.
Lawrence Fok, who among other things is responsible for our Exchange Business Unit, will now explain H-shares Index Futures in detail. Following his presentation, Lawrence, Calvin and I will be glad to take any questions you might have regarding this new product.
Lawrence, please.