18 August 2019
First Day Of Trading Of The Lunar New Year at The Hong Kong Stock Exchange (HKEx)

The Big Picture: RMB FUTURES

Hong Kong Exchanges and Clearing Ltd. (HKEx) (00388.HK) will add the world’s first deliverable renminbi futures to after-hours trading on April 7, stepping up the game in Chinese currency related business.

The futures, which will have a market maker, have a price limit of plus or minus 3 percent of the last traded price of each RMB futures contract month during the day trading, the local stock exchange operator said on Tuesday.

The new product will have coverage of 16 months from April. The bourse will also introduce a fourth calendar-quarter month of 2015 June on the same day it launches the RMB futures. The calendar spreads available for trading will also be boosted from six to 10.

HKEx chief executive Charles Li also said the bourse will launch LMEwire, a London Metal Exchange trade reporting service, in September. It will begin consultations this year on a closing auction for the cash market and circuit breakers to protect the market from “disorderly” volatility.

The Chinese currency has been relatively volatile in recent weeks, prompting businesses and traders to call for more hedging instruments to reduce risks. 

Meanwhile, HKEX warned last week that market sentiment in Hong Kong is unlikely to improve significantly in the near term due to uncertainties surrounding China’s economy.

The subdued investor mood will weigh on trading activity and keep in check the average daily turnover of the Hong Kong market, it said on Feb. 27.

“Given the outlook — you guys know better than we do — what investors are thinking about China these days,” said Romnesh Lamba, co-head of global markets at HKEx. “Probably we won’t see a huge uplift in market sentiment anytime soon.”

Shanghai mulls board for emerging industries

The Shanghai Stock Exchange is studying a trading board for strategic emerging industries to enable larger and more mature firms to raise funds from the stock market, Shanghai Securities News reported Wednesday, citing bourse chairman Gui Minjie. Trading rules will be adjusted to distinguish the proposed board from other markets, the report said. At present, smaller firms can tap the Growth Enterprise Market for funds.

CSRC to unveil preferred stock trial scheme

The government will unveil a trial scheme soon for preferred stocks after public consultation, China Securities Journal reported Wednesday, citing Wang Xian, deputy director of market supervision at the China Securities Regulatory Commission. All qualified listed and non-listed firms can apply to issue such stocks. The scheme is open to all industries. Also, a draft proposal intended to avoid double taxation on private equity funds will be submitted this year, Wang was quoted as saying.

– Contact HKEJ at [email protected]


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