The BRICS Exchanges Alliance finally launched its first cross-trading product last Friday, and as predicted in a previous column it was a modest debut.
The alliance - made up of Brazil, Russia, India, China and South Africa - was formed in October last year with the intention of allowing emerging markets' bourses to work together to encourage cross-trading of various products. For Hong Kong Exchanges and Clearing, it was a good chance to represent China in an international alliance, as well as develop new products.
The alliance on Friday introduced the cross-listing of benchmark index futures. In Hong Kong things were quiet after the launch, with only five trades made on India's Sensex Index futures and no trading futures of Brazil's Ibovespa, Russia's Micex Index or South Africa's FTSE/JSE Top 40.
HKEx has at least been diligent in promoting the product on its website with the turnover of each type of index future, and a description of the product.
But the HKEx lost out to India's Bombay Stock Exchange (BSE) in the promotion stakes. The Indian market had a lot of information on its website to introduce each of the member exchanges of the BRICS alliance as well as a detailed description of each of the various markets' index futures.
Effort brought rewards, with India's market recording the most trades of the new alliance. It recorded 4,860 Hang Seng Index futures contracts traded. Since they were traded at a lower value than in Hong Kong, the value was only equivalent to about 220 HSI futures traded in Hong Kong.