Stock futures move 'to get in ahead of rivals'
AS the stockbrokers association cried foul, Hong Kong Futures Exchange (HKFE) chief executive Ivers Riley defended the move to offer stock futures, saying if the exchange had not, someone else would have.
Mr Riley said the move was necessary for the territory to remain competitive and he defended the secrecy surrounding it.
Publicity could have spurred on rivals outside the territory, he said.
His comments came as the stockbrokers association called on the Government to abort the planned stock futures, and questioned the lack of consultation by the Securities and Futures Commission before it approved the new instruments.
Mr Riley said the HKFE had to act quickly before outside competitors beat Hong Kong to the punch.
'We know there are other activities going on in other Asian markets,' he said, citing Singapore's move to list Nikkei 225 futures and options, and the resultant loss of business for Japan.
'You would have been very nervous that they [Singapore] would think about the various markets in the region and you would also get extremely nervous when you saw them extend [such futures contracts] to the Japanese government bonds.
'And when you saw them do a future on the Hong Kong index as they did, you know they have targeted the Hong Kong market. After those three items, you don't have to be paranoiac to recognise what's going on.' Mr Riley did not see Australia as an immediate threat and stressed it did not trigger this action.
The contracts would complement the stock exchange options, he said.
'As it [the new stock futures contract] starts, there will be clear recognition that this should contribute to the stock exchange options programme,' he said.
While the HKFE did not seek prior approval from the stock exchange, Mr Riley said it told the stock exchange of its plans as a matter of courtesy. 'But it is also true that we very much respect them and their opinions.'