The market for H-shares futures has become a victim of the success of the index. "The increase in the level of the underlying index has raised the contract size of one H-shares index futures contract substantially since its debut, resulting in demand for a smaller contract," says Gerald Greiner, chief operating officer of HKEx, the company that manages the exchange.
The exchange launched its first H-share futures at the end of 2003, when the index was at about 4,000 points. These contracts priced each index point at HK$50, meaning that a contract to strike at 4,100 would have had a value of about $25,000. But now that the index is up at the 14,000 level futures contracts are trading at about $90,000 each.
Mini contracts will re-open the H-share futures market for smaller investors who find the full contracts a bit rich. The new instruments will price each index point at HK$10, valuing the contracts at a much more affordable $18,000.
HKEx will promote the new contracts with online trading games that offer gold ingots worth a total of HK$150,000 as prizes. Phillip Commodities, Sun Hung Kai Commodities and Taifook Futures will launch the games in the second quarter of the year.
¬ Haymarket Media Limited. All rights reserved.
