HKEx Expands Offering with Seven New Stock Sector Futures

Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term group Hong Kong Exchanges and Clearing Limited (HKEX) has announced the introduction of several new futures contracts across a total of seven sectors of its stock market, Asia’s third largest by market capitalization, according to a HKEx statement.

The launch of the new stock exchange futures will take place on May 9, 2016, and will fortify an already robust offering of equity derivatives on HKEx’s platform. As a result, seven new sector index futures will be launched, including the following:

• CES Gaming Top 10 Index Futures
• Hang Seng Mainland Oil & Gas Index Futures
• Hang Seng Mainland Banks Index Futures
• Hang Seng Mainland Healthcare Index Futures
• Hang Seng Mainland Properties Index Futures
• Hang Seng IT Hardware Index Futures
• Hang Seng Software & Service Index Futures

An in-depth prospectus of each sector index future can be accessed by the following link. Overall, the aforementioned indices will be collectively weighted by market capitalization, with periodic adjustments to constitute the stock’s free float. More specifically, each index family can also yield up to ten of the largest Hong Kong-listed stocks in the sector.

According to HKEx Market Development Division Co-Head Li Gang in a recent statement on the upcoming launch of the new indices: "We are introducing futures that will enable market participants to gain exposure to several key stocks in closely watched sectors such as software, Mainland Banks and Mainland Properties through just one contract."

"Investors will be able to use our sector index futures for Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term, and we think the new products will be very attractive to market participants with interest in the sectors covered by the products," he added.

"Sector index futures build on our strengths in equity derivatives and Mainland China-related products. One of the key initiatives in our current strategic plan is to launch new equity derivatives with Mainland, Hong Kong and international underlying assets," reiterated HKEx Market Development Division Co-head Romnesh Lamba in an accompanying statement.

Earlier this month, HKEx disclosed its market figures for the month ending January 2016, which highlighted a strong performance across its securities and derivatives business. During January, HKEx reported an average daily turnover of $82.2 billion across its securities business, which represented 33.4% MoM growth from $61.7 billion back in December 2015.