Hong Kong Exchanges and Clearing (HKEx) is stepping up promotion of its CES China 120 index futures (CES 120 Futures) contract in advance of Shanghai-Hong Kong Stock Connect, which is expected to bring more cross-market investments.  CES 120 Futures provides investors with a cross-border position with an effective cross-boundary hedging and risk management tool. 

CES 120 Futures is the only futures contract based on an underlying index, namely the CES China 120 Index (CES 120), that tracks both Mainland China's A-shares and China stocks listed in Hong Kong.  CES 120 is one of the indices in the Cross Border Index Series introduced by China Exchanges Services Company Limited, a joint venture of HKEx, the Shanghai and Shenzhen stock exchanges engaging in the development of indices and products.

Liquidity Provider Programme

HKEx today (Friday) also announced that SG Securities (HK) Limited is registered as a Liquidity Provider (LP) for the CES 120 Futures effective 1 August 2014, bringing the total number of LPs for CES 120 Futures to four. 

The other three existing LPs include:

1.  Flow Traders Asia PTE via ABN AMRO Clearing Hong Kong Ltd.
2.  Optiver Trading Hong Kong Limited
3.  Merrill Lynch Far East Ltd.  

LPs are required to provide continuous two-sided quotes for at least five contracts in at least the first two contract months with a maximum bid / ask spread of 0.5 per cent of the best bid during at least 70 per cent of all trading hours.

Joint Promotional Programme

HKEx also plans to launch a joint promotional programme on CES120 futures to support Participants of the Hong Kong Futures Exchange (HKFE), a wholly-owned subsidiary of HKEx, to enhance CES 120 Futures trading knowledge of their staff and clients.  The programme, which will be conducted from 1 October to 15 December 2014, will also familiarise brokers and their clients on using CES 120 Futures as a hedging tool for the China market with the upcoming Shanghai-Hong Kong Stock Connect.

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