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Hong Kong Mulls Mainland Stock Futures as New Hedging Tool

By Liu Caiping and Han Wei / Feb 28, 2019 05:38 PM / Finance

Photo: VCG

Photo: VCG

The operator of Hong Kong’s stock exchange is planning to launch futures products with Chinese mainland shares as the underlying asset by 2021 as part of initiatives to strengthen ties with the mainland and elevate the city’s relevance to global markets.

The launch of A-share futures products will help international investors hedge risks for their investments in China shares and enable an increase in A-shares’ weighting in international benchmark indexes, said the Hong Kong Exchanges and Clearing Ltd. (HKEx), without offering details about the planned products.

The new product is among key initiatives outlined by HKEx in its strategic plan for the period between 2019 and 2021, issued Thursday.

The HKEx will also enhance the connect programs linking the stock and bond markets in Hong Kong and the mainland, expand capital flows between the two sides, and expand post-trade infrastructure to make Hong Kong a trusted and secure cross-border trading, settlement, clearing and custody center, according to the plan.

Related: In Depth: China’s Tale of Two Markets

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