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HKEX Launches New MSCI Futures Contracts and Market Microstructure Enhancements

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28 Sep 2020

  • Two new MSCI Taiwan 25/50 index futures and three non-USD denominated MSCI futures contracts start trading today on HKEX
  • Latest tranche completes current phase of MSCI futures launch comprising 38 contracts on HKEX
  • Early Opening Hours for MSCI Taiwan contracts effective today, with trading starting at 8:45 am

 

Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to welcome today (Monday) the launch of the latest tranche of futures contracts as part of its new index licensing agreement with MSCI Inc., further expanding product breadth and depth in Hong Kong’s international financial markets.

“Today’s listing completes the current phase of the MSCI futures launch and further diversifies HKEX’s product ecosystem and investor base, making our markets even more vibrant, connected and attractive to our customers around the world,” said HKEX Head of Markets Wilfred Yiu.

Our goal is to make Hong Kong Asia’s derivatives hub. The MSCI derivatives products greatly expand the coverage of underlying assets beyond Hong Kong and Mainland China, to the rest of Asia. During the rollover period in recent weeks, we have seen significant growth in open interest, and liquidity is building strongly in a number of MSCI price return index contracts. We expect this exciting momentum to continue in the coming months as customers around the world look to Hong Kong to meet their trading and investment needs,” said Mr Yiu.

The five MSCI index futures contracts that were successfully listed on HKEX’s derivatives market earlier today are:

  1. MSCI Taiwan 25/50 (USD) Index Futures

  2. MSCI Taiwan 25/50 Net Total Return (USD) Index Futures

  3. MSCI Singapore Free (SGD) Index Futures

  4. MSCI Japan (JPY) Index Futures

  5. MSCI Japan Net Total Return (JPY) Index Futures

Open interest in MSCI contracts grew significantly in September during the quarterly and monthly roll periods for futures contracts, reflecting increasing demand for the MSCI derivatives products on HKEX. In particular, the MSCI Taiwan Net Total Return (NTR) futures contract had open interest of US$465 million as of 25 September, up from US$12 million two weeks earlier on 11 September, while open interest in the MSCI China Free NTR futures rose to US$233 million from US$110 million during the same period.

For all HKEX-listed MSCI Taiwan contracts, a pre-open trading session has now been introduced starting at 8:30 am Hong Kong time and the opening of the trading session has been advanced to 8:45 am starting from today. A six-month 100 per cent trading fee waiver has also been applied to all MSCI Taiwan and MSCI Singapore contracts traded on HKEX.

HKEX has already launched 33 MSCI index futures contracts in July and August. Following the introduction of the latest batch of futures contracts today, HKEX has completed the listing of all MSCI futures contracts in the current phase. HKEX plans to launch an MSCI Taiwan options contract later this year, subject to regulatory approvals and market conditions.

In May 2020, HKEX signed a major agreement with MSCI to license a suite of MSCI indexes in Asia and Emerging Markets for the launch of futures and options contracts in Hong Kong.  The agreement expands the existing partnership between the two companies, and further anchors HKEX and MSCI’s commitment to a long-term product development and innovation programme in the region.

HKEX has introduced incentive programmes for liquidity providers, proprietary traders and block trade participants to support the liquidity development of the contracts.  In addition, the Commission Levy charged by the Securities and Futures Commission will be exempted for the first six months of trading.

Please visit the designated page on HKEX's website for more detailed product specifications and planned launch dates of the MSCI derivatives contracts.

 

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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Updated 28 Sep 2020