The Derivatives Market Transaction Survey 2018/19 (2018/19 Survey) conducted by Hong Kong Exchanges and Clearing Limited (HKEX) found that Hong Kong’s derivatives market has grown significantly and continues to attract a wide range of investors.

The survey’s target respondents were Exchange Participants. The response rate was 61 per cent by number and 95 per cent by turnover value in the target population.

Key findings

Strong growth in HKEX’s derivatives market

• The market turnover volume in 2018/19 Survey¹ increased by 62 per cent to 284 million contracts over the previous survey², largely due to the increase in trading volume of HKEX’s flagship Hang Sang Index (HSI) products and a steady increase in the trading of Hang Seng China Enterprises Index (HSCEI) products.

Strong International Participation

• Overseas institutional investors had the biggest market share at 26 per cent, followed by local retail investors (15 per cent) and local institutional investors (14 per cent).
• Among overseas investors, US investors remained the largest group, accounting for 33 per cent of total overseas investor trading and 10 per cent of total market volume. Asian investors contributed in aggregate 32 per cent of overseas investor trading and 10 per cent total market volume. European investors contributed in aggregate 23 per cent of overseas investor trading and 7 per cent of total market volume.
• Overseas investors, and mostly overseas institutional investors, were the dominant contributors to the trading of index futures (52 per cent) and USD/CNH futures (57 per cent).

Growth in Local Investors

• The contribution from local investors, both retail and institutional, increased to 29 per cent from 21 per cent in 2014/15. In particular, the contribution from local institutional investors jumped to 14 per cent from 6 per cent.

Diverse Transaction Purposes

• Pure trading and hedging were the two main transaction purposes in the latest survey, accounting for 43 per cent and 36 per cent of trading turnover respectively.
• There was a significant increase in the contribution of arbitrage trading to the overall derivatives market to 21 per cent in the 2018/19 Survey from 14 per cent in the previous survey.

For further details, please see the survey results report on the HKEX website.

 

Notes:

1. The Survey covers transactions during July 2018 to June 2019 in the major HKEX futures and options products, namely Hang Seng Index (HSI) futures, HSI options, Mini-HSI futures, Mini-HSI options, Hang Seng China Enterprises Index (HSCEI) futures, HSCEI options, Mini-HSCEI futures, USD/CNH futures and stock options. 
2. The previous survey was conducted in 2014/15.

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets.  HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.

www.hkexgroup.com

 

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