Hong Kong bourse to launch MSCI China A-share futures in October
The Hong Kong exchange operator will launch its first derivatives product based on onshore Chinese shares in October, giving international investors a new tool to manage risks in their portfolios.
The long-awaited futures contract will be based on the MSCI China A 50 Connect Index, made up of 50 of the largest A-shares – Chinese shares traded onshore – including at least two stocks from each industry sector, Hong Kong Exchanges and Clearing (HKEX) said in a Friday statement.
International investors have been increasing their exposure to onshore-listed Chinese stocks in recent years, but often complain that they have limited access to derivatives products like futures to manage their risk.
HKEX and MSCI have been trying to launch such a product, which is finally set to be launched on October 18, for several years.
"The launch of MSCI China A-share index futures in Hong Kong is a positive step towards resolving one of the four market accessibility issues highlighted by global investors," said Henry Fernandez, MSCI's chairman and CEO.
HKEX Chief Executive Officer Nicolas Aguzin said the move marks a key step forward in furthering the progress of building an offshore Chinese mainland equities derivatives suite in Hong Kong.
In a separate statement on Friday, the China Securities Regulatory Commission (CSRC) said the launch of the new product would help to attract more long-term foreign capital into A-shares.
The CSRC said it and Hong Kong's Securities and Futures Commission had improved their cooperation mechanisms related to supervising derivatives to enable the launch of the new product.
The Chinese regulator also said it would deepen reforms in China's domestic index futures market, to promote the coordinated development of onshore and offshore derivative markets.