MSCI, HKEX Agree to Expand China Stock Futures Access for Overseas Investors
Liao Shumin
DATE:  Mar 11 2019
/ SOURCE:  yicai

(Yicai Global) March 8 -- Global index compiler MSCI has today struck a licensing deal with bourse operator Hong Kong Exchanges and Clearing to introduce futures contracts on its China A Index, expanding off-shore access to the country's mainland A-shares for foreign investors.

The agreement, subject to regulatory approval and market conditions, will lead to the inclusion of 421 large and mid-cap A-shares on a pro forma basis on the index from this November. They will be accessible via the Stock Connect program.

The MSCI China A Index will represent the A-share portion of the MSCI Emerging Markets Index.

"This new agreement with MSCI will facilitate the development of a key risk management tool for international investors who need to manage their A-share equity exposure," HKEX Chief Executive Charles Li said in a statement. "The international trading community has wanted a product like this for some time, and HKEX's MSCI China A Index futures contracts will directly address their needs."

China's mainland stock market lacks a short-selling mechanism and foreign investors can only do so through Singapore's A50 Index Futures. Up to now, China's mainland stock markets have only offered futures products via the Shanghai-Shenzhen 300, the SSE 50, and the China Securities 500 indexes, which are not open to foreign investors.

Once the launch date has been finalized, HKEX will inform the market of detailed product specifications.

Editor: William Clegg

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