Trad­ing vol­ume of fu­tures hits record high

China Daily (Hong Kong) - - BUSINESS DIGEST - By GAO CHANGXIN in Shang­hai gaochangxin@chi­nadaily.com.cn

The trad­ing vol­ume of the Chi­nese fu­tures mar­ket hit an all-time high in the first 11 months of the year, boosted by the in­tro­duc­tion of new con­tracts.

Trade vol­ume rose 45.86 per­cent yearon-year to 1.9 bil­lion lots in the first 11 months of this year. In terms of value, vol­ume in­creased 61.93 per­cent year-on-year to 246 tril­lion yuan ($40.37 tril­lion) in the same pe­riod. That’s the high­est amount since the coun­try first set up a fu­tures mar­ket in 1993.

Fi­nan­cial fu­tures, es­pe­cially stock in­dex fu­tures, led the growth. The China Fi­nan­cial Fu­tures Ex­change — the coun­try’s big­gest mar­ket­place for fi­nan­cial fu­tures by trad­ing vol­ume — said that trade vol­ume in­creased 98.29 per­cent year-onyear to 130 tril­lion yuan in the Jan­uaryNovem­ber pe­riod. Stock in­dex fu­tures’ trad­ing vol­ume now takes up 9.4 per­cent of the over­all mar­ket.

Bei­jing CIFCO Fu­tures Co Ltd, a fu­tures bro­ker­age, wrote in a re­cent re­port that a lack­lus­ter stock mar­ket turned in­vestors’ at­ten­tion to stock in­dex fu­tures, which of­fer op­por­tu­ni­ties to cash in on a bear mar­ket.

“In­vestors’ need to hedge the stock mar­ket with in­dex fu­tures helped push up trad­ing vol­ume,” CIFCO said in the re­port.

The mar­ket-en­trance thresh­old for stock in­dex fu­tures was also low­ered this year, from 500,000 yuan to about 3,500 yuan.

That helped bring in more re­tail in­vestors.

Gold and sil­ver trad­ing also soared in the sec­ond half of the year, af­ter ma­jor ex­changes started overnight trad­ing. The Shang­hai Fu­tures Ex­change saw its ac­counts more than dou­ble to 60,800 af­ter overnight trad­ing was in­tro­duced on July 5. The Dalian Com­mod­ity Ex­change’s new egg fu­tures saw a trad­ing vol­ume of 10.61 bil­lion yuan in its first trad­ing day on Nov 8.

Seven new types of fu­tures con­tracts hit the mar­ket this year, in­clud­ing coke, eggs and iron ore, which also helped to ig­nite in­vestor en­thu­si­asm. Three more types of con­tracts are ex­pected to be launched this year, such as ply­wood and fiber­board.

The fu­tures mar­ket ben­e­fited from a spillover ef­fect from other un­der­per­form­ing cap­i­tal mar­kets this year, said Zhan Xiao, an an­a­lyst with Haichao Se­cu­ri­ties Co Ltd.

“The fu­tures mar­ket is gen­er­ally in bet­ter form than other mar­kets, such as prop­erty and eq­ui­ties, so in­vestors moved their funds to fu­tures,” Zhan said.

He be­lieves that trad­ing vol­ume in China’s fu­tures’ mar­ket will keep ex­pand­ing, as Bei­jing loosens con­trols on Sta­te­owned com­pa­nies’ hedg­ing ac­tiv­i­ties and in­tro­duces more con­tracts into the mar­ket.

Chi­nese au­thor­i­ties have said re­cently that rules on State- owned com­pa­nies’ hedg­ing ac­tiv­i­ties may be loos­ened to deepen their in­volve­ment in the fu­tures mar­ket.

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