The Hong Kong stock exchange saw 415 contracts written on the newly launched yuan futures market yesterday, marking another key step on the city's road to establishing itself as the main centre for the offshore yuan trade. The world's first exchange-traded deliverable yuan futures market catered for investors who needed to hedge currency risks as volatility in yuan trading increased, analysts said. "Today was a good first step for our [yuan] futures, the first [yuan-traded] product in our derivatives market, and a very significant milestone for HKEx [Hong Kong Exchanges and Clearing]," Calvin Tai, HKEx's head of trading, said. "We were pleased to see good market depth and bid-offer spreads." By launching a yuan futures contract, the market was able to exploit the yuan pool in Hong Kong and place itself in the game of yuan business ahead of the curve, Raymond Yeung, an economist at ANZ Bank, said. "HKEx would need to compete against the OTC [over-the-counter] market, and I don't think it would be able to replace the OTC market in the near term," Yeung said. He added that the low-margin requirement for futures trading would interest investors who did not need a custom contract to hedge their trade-related foreign-exchange exposure. Nathan Chow, an economist at DBS, said the new market could provide small and medium-sized investors access to yuan trading. The market could also minimise counterparty risks and bring more transparency than the OTC market, which allows parties to trade directly without going through the bourse. The OTC market is already offering a range of products, such as yuan non-deliverable forwards and CNH (yuan traded in Hong Kong) deliverable forwards. The yuan trades at different exchange rates to the US dollar on the mainland and in Hong Kong. Beijing maintains tight control on the onshore yuan exchange rate. HKEx's yuan futures contract will require delivery of US dollars by the seller and payment of the final settlement value in yuan by the buyer at maturity. The contract will be quoted in yuan per dollar, with the trading and settlement fees charged in yuan.