HKEX, MSCI sign derivatives deal

Move will enhance Hong Kong’s status of financial hub

The Hong Kong Futures Exchange has signed an agreement with MSCI Inc. to license a suite of MSCI indexes covering Asia and Emerging Markets for the introduction of futures and options contracts in the city.

The move shows that the national security legislation by the NPC will enhance the Hong Kong Special Administrative Region (HKSAR)’s global financial hub status, rather than shaking it.

The introduction of the 37 futures and options contracts remains subject to regulatory approval and market conditions, read a statement on the website of Hong Kong Exchanges and Clearing Ltd (HKEX) on Wednesday.

Charles Li, chief executive of the HKEX, stated that the agreement showcased the city’s unique role connecting markets and investors all across the world, and represented “another significant development in continuing to build the breadth, depth and attractiveness of Hong Kong’s vibrant financial markets.”

As an internationally recognized index provider, MSCI is a desirable partner for HKEX, and the move will expand the variety of products trading in the Hong Kong financial markets and further enhance the city’s global financial hub status, Hong Kong Financial Secretary Paul Chan Mo-po said on Wednesday.

Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Wednesday that the agreement is expected to attract worldwide attention and boost global capital flows into Hong Kong.

“Based on the stock link mechanisms provided by the Hong Kong-Shanghai

Stock Connect and the Hong KongShenzhen Stock Connect, investors from the Chinese mainland may be able to invest in futures and options contracts trading in Hong Kong in the future, thus enhancing the city’s international financial standing,” Xi said.

As a draft decision to introduce national security legislation for the HKSAR is under deliberation at the NPC, some Western media have raised concerns the law would shake Hong Kong’s international standing as a global financial center.

Chinese State Councilor and Foreign Minister Wang Yi said on Sunday in Beijing that the proposed legislation covering Hong Kong will not affect the legitimate rights of foreign investors in the city, and the new legislation would be propitious to maintain the city’s role as a financial, trade and shipping hub.

US President Donald Trump said at a White House news briefing on Tuesday that the US is working on a “strong” response to the planned law for Hong Kong, though he did not elaborate, Reuters reported.

Liang Haiming, chairman of the China Silk Road iValley Research Institute, told the Global Times on Wednesday that the Trump administration is unlikely to launch any sanctions against Hong Kong due to the widespread presence of US financial companies in Hong Kong.

“If Trump insists on going against the interests of the US corporate sector and the Wall Street to impose sanctions on Hong Kong, American tycoons may ‘do anything’ to stop Trump’s re-election,” he said, noting that this would be a greater loss than gain for Trump.

“If things develop as I expect, Hong Kong will usher in the best era,” he said.