Hong Kong to launch MSCI China A Index futures for global investors to hedge against risks in Asia’s largest stock market

The MSCI China A Index comprises 421 large and mid-cap Chinese stocks denominated in yuan

The launch, which does not have a date, would end Singapore Exchange’s monopoly on offshore derivatives based on China’s A shares

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Hong Kong Exchanges and Clearing Limited (HKEX) chief executive Charles Li Xiaojia (L) with MSCI Inc’s managing director Baer Pettit at the MSCI's A-share inclusion ceremony and press briefing at the HKEX at Exchange Square in Central on 31 May 2018. Photo: SCMP/Xiaomei Chen.

Published: 11:16am, 11 Mar 2019Updated: 1:59pm, 12 Mar 2019

Hong Kong Exchanges and Clearing Limited (HKEX) has signed an agreement with MSCI to offer futures contracts on the MSCI China A Index, giving global investors a tool to hedge their investments in Asia’s largest equity market.

The index futures, which does not have a launch date, is part of the exchange operator’s three-year plan to transform itself into a global financial market place, by offering a greater variety of products, including exchange-traded funds (ETFs), futures and options, as well as commodity and currency contracts.

The new plan, which would end the monopoly by Singapore Exchange on offshore derivatives based on the A-share market, comes as the Chinese market has started experiencing some volatility.

The Shanghai Composite Index tumbled 4.4 per cent on Friday, the most since October, after some leading mainland brokerages suggested investors should sell some stocks with the biggest gains this year. Before the plunge, the Shanghai benchmark index had risen 25 per cent while Shenzhen was up 34 per cent in the first two months of trading.

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