Index opens with bets on gains
By Winny Wang |
April 17, 2010, Saturday
|
Print Edition
Print Edition
CHINA'S new stock-index futures opened for trading yesterday, and investors immediately bet on market advances after the nation recorded sizzling 11.9 percent first-quarter growth.
The new instrument offered four contracts based on the CSI 300 Index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges. The gains came despite about a 1 percent drop in the main indices.
"Trading was a bit speculative as the spreads between the spot index and the futures were quite big," said Liu Yu, an Orient Securities Co trader. "With more investors to enter the market, the futures prices may drop."
Chinese stocks have been rallying this year amid Chinese government measures to defuse possible market bubbles by reining in lending to subdue a skyrocketing property market. The gains also reflect expectations that the government may allow the national currency, the yuan, to gradually appreciate against the US dollar and other global currencies.
The futures indexes are the latest in a series of reforms by the Chinese government to broaden investment channels and remodel local markets in line with their overseas counterparts. The futures contracts allow investors to bet on the direction of markets, hedging their positions on stock portfolios.
The May futures contract on the CSI 300 climbed to 3,431.2 after rising to as high as 3,488 in Shanghai.
Futures trading is limited to investors who have sizable reserves to put up against their market bets. The government is keen to prevent the kind of rampant speculation that torpedoed futures trading in the mid-1990s.
The new instrument offered four contracts based on the CSI 300 Index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges.
The May futures contract was up 0.49 percent from the base value of 3,399 points set for the all the contracts by the China Financial Futures Exchange a day earlier.
Turnover for May contracts hit 48,988 lots, much bigger than an expected 100,000 lots.
The June, September and December contracts all advanced, finishing at 3,441.60 points, 3,512 points and 3,557 points, respectively.
The new instrument offered four contracts based on the CSI 300 Index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges. The gains came despite about a 1 percent drop in the main indices.
"Trading was a bit speculative as the spreads between the spot index and the futures were quite big," said Liu Yu, an Orient Securities Co trader. "With more investors to enter the market, the futures prices may drop."
Chinese stocks have been rallying this year amid Chinese government measures to defuse possible market bubbles by reining in lending to subdue a skyrocketing property market. The gains also reflect expectations that the government may allow the national currency, the yuan, to gradually appreciate against the US dollar and other global currencies.
The futures indexes are the latest in a series of reforms by the Chinese government to broaden investment channels and remodel local markets in line with their overseas counterparts. The futures contracts allow investors to bet on the direction of markets, hedging their positions on stock portfolios.
The May futures contract on the CSI 300 climbed to 3,431.2 after rising to as high as 3,488 in Shanghai.
Futures trading is limited to investors who have sizable reserves to put up against their market bets. The government is keen to prevent the kind of rampant speculation that torpedoed futures trading in the mid-1990s.
The new instrument offered four contracts based on the CSI 300 Index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges.
The May futures contract was up 0.49 percent from the base value of 3,399 points set for the all the contracts by the China Financial Futures Exchange a day earlier.
Turnover for May contracts hit 48,988 lots, much bigger than an expected 100,000 lots.
The June, September and December contracts all advanced, finishing at 3,441.60 points, 3,512 points and 3,557 points, respectively.
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