HKEX launches its first China A-Share futures contract
The Hong Kong stock exchange has launched its first A-share derivatives contract for global investors to manage their China exposure. On October 18, the Hong Kong Exchanges and Clearing Limited (HKEX) announced the launch of the MSCI China A 50 Connect Index Futures. The contract started trading on the same day.
The futures contract is based on the MSCI China A 50 Connect Index, which tracks 50 of the largest stocks listed in Shanghai and Shenzhen available via Stock Connect, with at least two stocks from each selected sector. The largest is battery giant Contemporary Amperex Technology, with an index weighting of 8.37%.
Launched in 2014, mainland China-Hong Kong Stock Connect has become the most popular avenue for global investors to access mainland China’s equities markets. According to the HKEX, the scheme saw record half-yearly trading volumes this year, with average daily turnover of northbound and southbound trading up 54% and 132% respectively. The new contract has been certified by the United States Commodity Futures Trading Commission, meaning that U.S. investors can trade the new contract at launch. To promote the new product, the HKEX is waiving the trading fee for the contract until June 2022. The first bourse to offer index futures tracking A shares was Singapore, in 2006.
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