Chinese exchanges to build combined indices
Within the next three months, venue operator Hong Kong
Exchanges and Clearing (HKEx) will launch new combined index and derivative
products in a joint venture with the Mainland’s Shanghai and Shenzhen stock
HKEx said the JV would focus on developing and franchising
index-linked and equity derivatives products and, to support this activity, create cross-border indices based on products traded on the three markets.
“To start with, the JV company plans to develop a series of
cross-border indices on which a family of index products will be introduced,”
the venue operator said in a statement to the press. “This series of indices
will include a benchmark cross-border index comprising large Mainland
enterprises listed on The Stock Exchange of Hong Kong Limited, Shanghai and
Shenzhen, and two indices based on this cross-border index,
comprising A-share constituents and Hong Kong market
Equity index futures and options based on these indices will
be traded on HKEx’s derivatives market.
The partnership will also yield industry classifications for listed
companies, information standards and information products and it will promote
securities markets, and enhance market participants services, technical services
and infrastructure establishment. The JV partners will each stake HK$100 million (US$12.8
million) in the JV Company as initial paid-up capital, with a management board to be made up of three representatives from each exchange.
The JV was preluded
in August with the three exchanges revealing they had agreed in principle
to explore the idea of joint products.
While the venues are increasingly in competition with each
other for Chinese listings, they have already collaborated on a number of
fronts, including regulatory co-operation and a China Stock Markets website.
“As China continues to open up and the RMB gradually internationalises, it is inevitable we will have to compete in the international capital market. Our efforts to further cooperation with HKEx and develop products for the offshore market will bring about a win-win situation for both Hong Kong and the Mainland,” said Zhang Yujun, president of the Shanghai Stock Exchange.