HKEx to add yuan futures in night trading session

Hong Kong Exchanges and Clearing will add yuan currency futures in an after-hours evening session from April 7 in its latest effort to promote yuan products.

"The yuan has become very volatile recently while its trading pattern last week showed the currency did not always go up. This would be the right time for HKEx to extend the trading hours for yuan futures to allow investors to do some hedging," Charles Li Xiaojia, chief executive of the bourse, said as he unveiled HKEx's strategy at its annual media briefing yesterday.

The bourse is struggling to generate new income after it reported a lower-than-expected 11 per cent profit rise in 2013. Yuan futures were introduced last year to trade during normal daytime hours, hitting a record turnover of more than 6,000 transactions a day last week. This was more than 10 times its average turnover last year.

After-hours trading for yuan futures may also lure brokers who already trade Hang Seng Index futures and H-shares index futures and their miniature futures contracts from 5pm to 11pm. The extended session would double the trading hours to 12, which still fall short of the 23 hours in the United States.

The decision on yuan futures came after the currency posted last Friday its sharpest fall against the US dollar since 2007 as traders began to speculate that Beijing was going to allow the yuan to go lower to help exports.

Li said commodities would be another focus as the bourse rolled out a Hong Kong trading platform for the London Metal Exchange, the world's biggest exchange for physical metals. The platform will trade commodity contracts on a cash settlement basis for copper, iron ore and other metal products. All local futures brokers could trade on the exchange. "This would promote commodities trading in Hong Kong and prepare for a policy change to allow mainlanders to trade here in future," he said.