HKEx Expands Offering with Seven New Stock Sector Futures

The newly weighted stock exchange futures will launch on May 9, 2016, covering seven sovereign sectors.

Stock exchange group Hong Kong Exchanges and Clearing Limited (HKEX) has announced the introduction of several new futures contracts across a total of seven sectors of its stock market, Asia’s third largest by market capitalization, according to a HKEx statement.

The launch of the new stock exchange futures will take place on May 9, 2016, and will fortify an already robust offering of equity derivatives on HKEx’s platform. As a result, seven new sector index futures will be launched, including the following:

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  • CES Gaming Top 10 Index Futures
  • Hang Seng Mainland Oil & Gas Index Futures
  • Hang Seng Mainland Banks Index Futures
  • Hang Seng Mainland Healthcare Index Futures
  • Hang Seng Mainland Properties Index Futures
  • Hang Seng IT Hardware Index Futures
  • Hang Seng Software & Service Index Futures

An in-depth prospectus of each sector index future can be accessed by the following link. Overall, the aforementioned indices will be collectively weighted by market capitalization, with periodic adjustments to constitute the stock’s free float. More specifically, each index family can also yield up to ten of the largest Hong Kong-listed stocks in the sector.

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According to HKEx Market Development Division Co-Head Li Gang in a recent statement on the upcoming launch of the new indices: “We are introducing futures that will enable market participants to gain exposure to several key stocks in closely watched sectors such as software, Mainland Banks and Mainland Properties through just one contract.”

“Investors will be able to use our sector index futures for risk management, and we think the new products will be very attractive to market participants with interest in the sectors covered by the products,” he added.

“Sector index futures build on our strengths in equity derivatives and Mainland China-related products. One of the key initiatives in our current strategic plan is to launch new equity derivatives with Mainland, Hong Kong and international underlying assets,” reiterated HKEx Market Development Division Co-head Romnesh Lamba in an accompanying statement.

Earlier this month, HKEx disclosed its market figures for the month ending January 2016, which highlighted a strong performance across its securities and derivatives business. During January, HKEx reported an average daily turnover of $82.2 billion across its securities business, which represented 33.4% MoM growth from $61.7 billion back in December 2015.

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