THE controversial new stock futures contracts yesterday came under renewed fire from stock exchange loyalists but met cautious support among derivative users in the market.
The Hong Kong Futures Exchange told the stock exchange on Monday, one day before the public announcement, that it was launching two individual stock futures contracts after working on the plan secretly with the Securities and Futures Commission and the Financial Services Branch.
The announcement caught the stock exchange wrong-footed and aroused its ire - it has been struggling to develop its own stock options programme for almost two years.
Edward Lo, managing director of Bankers Trust (Asia) welcomed the new contracts. 'I think they're good. They offer more choice, which has to be a good thing for the market,' he said.
Candidates for seats on the stock exchange council yesterday denounced the new contracts as high-risk, claiming the exchange's stock options were a better bet.
Henry Chan of Sanfull Securities, in constituency C of the council election, said investors would use the futures market for speculation, not just hedging.
He defended the stock exchange, which had been accused of dragging its feet over its own planned options. Stock options needed special equipment, 'and it takes money to do a consultancy programme', he said.