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Denise Tsang

The Hong Kong Futures Exchange (HKFE) will extend trading hours and temporarily suspend trading fees to counter a looming threat from its Singapore counterpart.

 Futures exchange chairman Geoffrey Yeh Meou-tsen announced the proposed measures after a board meeting yesterday.

 The moves are the latest in an escalating battle over Singapore's impending launch of a Hong Kong index futures product.

 They also come a day after Singapore announced fresh initiatives to enhance its attractiveness as a regional financial centre. These include merging and listing its stock and futures exchanges.

 The HKFE proposes to extend trading hours by 15 minutes before the existing opening at 10 am and 15 minutes after the usual 4 pm close.

 The move would bring futures trading hours in line with the Singapore International Monetary Exchange (Simex).

 The HKFE will also waive trading fees on futures products next month, which Mr Yeh said might cost about $10 million in income.

 'In the wake of Simex's competition, we will roll out measures to attract more trading in the futures exchange,' Mr Yeh said.

 'We talked about Simex's competition and we're sure we'll win.'  The HKFE today will seek approval for the measures from the Securities and Futures Commission.

 If approved, HKFE chief executive Randy Gilmore plans to implement the change on November 20, one trading day before the launch of HiMSCI futures by Simex on November 23.

 Some stock exchange council members and brokers opposed the proposal.

 They said an extended session would hurt the stock market and said they would debate the issue at today's exchange council meeting.

 'If the futures exchange opens earlier and closes later than the stock exchange, a lot of speculative activity will arise during the excess period when there is no stock-market trading,' one source said.

 The stock exchange has banned data providers from supplying real-time stock-price information to Morgan Stanley Capital International, which calculates the HiMSCI Index for Simex.

 Stock exchange chief executive Alec Tsui Yiu-wa will today hold talks with Simex officials and related parties over the launch.

 Mr Tsui said he did not consider the merger of the stock and futures exchanges in Singapore as a threat to Hong Kong.

 'I think Singapore is following a worldwide trend in recent years of mergers of exchanges.

 'The stock exchange has also been exploring possibilities to merge the stock and futures exchanges in Hong Kong for some years.'  He said the stock exchange would decide whether to lengthen its trading hours if the futures exchange's proposal was approved.

 Secretary for Financial Services Rafael Hui Si-yan said he thought Hong Kong was not under pressure to follow Singapore's lead and merge its two exchanges.

 Financial Secretary Donald Tsang Yam-kuen said he was not worried that Hong Kong's competitiveness would be eroded by the Singapore merger. However, he said Hong Kong must not underestimate the challenge from the island republic.

 Morgan Stanley Asia chairman and HKFE vice-chairman John Wadsworth declared his full support for the Hong Kong futures market yesterday, before withdrawing from the meeting to avoid a conflict of interest.

INSIDE Stakes raised in battle - Page 12 Not worth sacrifices - Markets, Page 12 



Trading hours lengthened, fees temporarily suspended in bid to counter regional