Relaunch of bond futures trading in sight
Beijing expected to announce restart of market for financial derivative soon, 18 years after billion-yuan scandal brought an end to system
Beijing is preparing to officially launch government bond futures after a successful simulated-trading experiment, in a move towards liberalising the interest-rate mechanism.
Guo Shuqing, chairman of the China Securities Regulatory Commission, told a forum in Beijing yesterday that the regulator was ready to restart trading of the financial derivative, 18 years after a trading scandal prompted Beijing to halt it.
The chairman did not give a clear date for the official launch but he indicated an official announcement might be on the way.
The Shanghai-based China Financial Futures Exchange launched simulated trading of government bond futures in February last year, a month after Guo announced plans to develop the futures market.
The launch of bond futures could help fund borrowing costs more efficiently and benefit the central government in reforming the interest-rate system, analysts said.
Since Guo became the commission's chairman in late 2011, he has sought to liberalise the futures market in the hope that its expansion can support economic growth as China gains pricing power on commodities and financial products.