HKEx postpones launch of new market products
Hong Kong Exchanges and Clearing (HKEx) has postponed to early next year plans to launch a wide range of new futures products.
The exchange had planned to introduce the products before the end of next month.
Chief operating officer Frederick Grede said the new products under consideration included regional index-related futures products, commodities futures and options, long-term interest rate futures and more stock options.
Mr Grede last month said the exchange would like to launch one or more new products by the end of the year, but yesterday he said: 'We would not expect to see any new futures products to be launched until the first quarter of next year.'
Brokers speculated the delay was due to weak stock market sentiment in the past few weeks, making it difficult to introduce new products. However, Mr Grede rejected such claims.
'It is always hard to wait for the perfect timing to launch new futures products,' he said.
He said the delay was mainly due to HKEx wanting more time to prepare marketing for the introduction of the new products. It also needed more time to study which new products should be introduced first.
Mr Grede said the new products to be launched would be mainly targeted at retail investors.
'At present, the retail participation in our futures market is lower than in other overseas markets. We would like to see more retail investors trading on the local derivatives market,' he said.
In Hong Kong, less than 40 per cent of the futures market's turnover was traded by retail investors, with the rest mainly traded by institutional investors such as fund managers, he said.
This was lower than in South Korea, where 70 per cent of futures trading was done by retail investors, and also lower than the 50 per cent retail trading mark in Taiwan.
The HKEx last month launched the mini-Hang Seng Index futures contracts as part of efforts to encourage retail investors to trade futures products.
The mini-contracts have one-fifth of the value of normal HSI futures, so it is cheaper for investors to trade the miniature version.
Brokers had reported to the exchange that most mini-HSI futures were traded by retail investors, many of whom were first-time traders in futures products, Mr Grede said.
The volume of mini-HSI futures is increasing. Trading volume rose to an average of 2,000 a day last week, compared with only 988 contracts traded on their debut on October 9.
The number of open interests, contracts which investors have opened but not yet settled, increased to 1,300 on Monday from about 350 contracts on the first day.