Night trading off to slow start
New index futures session witnesses thin volumes, sparking concern that it will be easily manipulated by big sharks and lead to volatility
After-hours trading of equity futures debuted with thin volumes last night, fuelling concern among local brokers that big investors could use it to manipulate stocks, leading to financial instability.
Last night, the stock exchange for the first time opened a trading session from 5pm to 11pm for standard contracts on the benchmark Hang Seng Index (HSI) and the Hang Seng China Enterprises Index (HSCEI), which tracks major mainland-listed firms. But there seemed to be little appetite for the new session.
A total of 1,361 HSI futures contracts were traded, compared with 61,993 contracts in the day trade. A total of 492 HSCEI futures contracts were transacted, compared with 51,400 in the day trade. The HSI futures closed at 21,647 points while HSCEI closed at 10,407 points last night.
"We can't expect too much volume on the very first day. This is a new market, which is like small children. We need time for the children to grow up slowly," said Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia.
We can't expect too much volume on the very first day. This is a new market, which is like small children. We need time for the children to grow up slowly
After opening with two index futures, the exchange will consider adding other products for the session, Li said. This would include fixed-income futures, currencies futures or other commodities products, but he did not give any timetable.