HK launches DJIA futures
It's Asia's first contract based on the US index, but Osaka is expected to follow suit soon
THE Hong Kong Futures Exchange yesterday launched Asia's first futures contract based on the Dow Jones Industrial Average and a market source said Osaka may be close to follow. Hong Kong Exchanges & Clearing (HKEx) deputy chief operating officer Lawrence Fok said at the launch that another market is expected to follow Hong Kong and launch an IA futures contract soon, but did not identify which market.
A source, however, said the Osaka Securities Exchange is expected to soon launch its own contract based on the US index.
HKEx head of corporate communication Henry Law said Hong Kong, as the first market to launch the product, will have the advantage in building liquidity. He said whether a second market's launch would compete with Hong Kong would depend on product interest in the market. The IA index is provided by Dow Jones Indexes and tracks the performance of 30 major stocks in the US market.
Mr Fok said the futures product is aimed at offering wider choices to investors and reiterated that the HKEx is not setting any volume or open interest targets because products take time to develop.
Analysts said it could take several months for the new contract to gain popularity, and noted that international futures and options products launched by HKEx in October have seen low trading volumes.
After less successful product launches, the Hong Kong Futures Exchange has designed this new product with local retail investors in mind. It will trade in Hong Kong dollars and have a contract multiplier of HK$10 per index point for easy overview.
Yesterday, the IA futures contract closed at 9,999 points, with 30 contracts traded. It opened at 9,993, a discount to the Dow Jones Industrial Average's closing of 10,007 on Friday. - Dow Jones Newswires |
