Futures News
- Govt. prepares stock index futures
Date: 29-Jun-2007 Sources: (Shenzhen Daily)
THE government has published rules for stock-index futures, paving the way for financial products that will let investors hedge risk in a market that's almost doubled this year.
The China Financial Futures Exchange said investors are required to put up 10 percent of a contract's value to trade CSI 300 Index-based futures. The rules were published Thursday on the exchange's Web site. No date was given for when the products will start trading.
Shang Fulin, chairman of the China Securities Regulatory Commission, wants to introduce more financial products in Asia's second-largest equity market to divert some investment. Shang said in January that stock index futures will be introduced when conditions mature. Xu Jun, a press official at the financial futures exchange, said it still doesn't have a timetable for when trading will start.
The value of the futures contracts will be the points of the CSI 300 Index multiplied by 300 yuan, the exchange said. At Wednesday's closing level of 4040.48, an investor will have to put up 121,214 yuan to trade the contract, valued at 1.21 million yuan (US$159,200), according to the rules.
'Small investors won't be able to buy stock index futures contracts because the contract value is too high,'' said Zhou Lei, chief risk officer of China Galaxy Futures Co. in Beijing. 'The complete rules are more or less the same as the draft rules, the stock market won't be negatively affected by the new rules very much.''
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