HKEX Launches MSCI China A 50 Connect Index Futures

Hong Kong Exchanges and Clearing Limited (HKEX) today announced the launch of its new A-share derivatives contract, the MSCI China A 50 Connect Index Futures. This represents a significant step in the further expansion of HKEX's derivatives product suite and reinforces HKEX's role as the go-to marketplace for China trading and investments.

HKEX is now home to the world's most complete and competitive offshore A-share equity and derivatives trading venue, offering global investors and risk managers a convenient and cost-effective solution to trade and manage their China exposure.

HKEX Chief Executive Officer Nicolas Aguzin said: "We are very excited to today launch our MSCI A 50 Connect Index Futures, confirming Hong Kong as the global international go-to market for accessing China. This new product further strengthens Hong Kong's role as the gateway to China for global investors and marks another great step forward in supporting the further internationalisation of China's capital markets."

The new futures contract is unique, as it is based on the MSCI China A 50 Connect Index, a sector-balanced index that selects 50 names from among the largest stocks listed in Shanghai and Shenzhen available via Stock Connect, and targets at least two stocks from each sector. This can prevent overweighting in specific sectors such as financials and underweighting in new economy sectors, providing investors with a risk management tool that truly represents China's economy.  

"China connectivity is Hong Kong's unique advantage, setting us apart from other international financial centres around the world. We look forward to continuing to develop Hong Kong's leading position as Asia's derivatives hub," said Mr Aguzin.  

The new contract provides international investors with a new and effective risk management tool to manage their portfolios of Stock Connect eligible A-shares, reflecting the increasing global reliance on Stock Connect to access Mainland China's burgeoning equity markets.

Since its launch in 2014, Stock Connect has become the key channel for international investors to access Mainland China's equities market and has helped facilitate the opening up of the A-share market. 

Stock Connect's trading volumes saw record half-yearly highs in 2021, with average daily turnover of Northbound and Southbound trading up 54 per cent to RMB114 billion and 132 per cent to $48 billion respectively.

The new contract has been certified by the US Commodity Futures Trading Commission to be offered and sold to persons in US, and US investors can trade the new contracts at launch.

To further support the development of the contract, HKEX is also offering a trading fee holiday for the first 6 months of launch.