Some cited the news for SGX's 3.7% stock slide. The FTSE China A50 Index Futures accounts for 40 per cent of SGX's total derivatives volumes.AS international fund interest in China is expected to climb, the battle to offer global investors hedging tools to manage their risk and exposure to Asia's largest equity market has gone up another notch.
The FTSE China A50 Index Futures is currently the only offshore futures contract tracking 50 Chinese A-shares and traded in US dollar. It is the biggest contributor to SGX's derivatives business, and generates about 40 per cent of the total derivatives volumes, enjoying a daily turnover of US$5 billion and notional open interest of US$12 billion. There is an estimated US$8 billion of ETF funds benchmarked to the index.
The new product is among a host of other derivatives launched by global exchanges including SGX over the years to help manage exposure to mainland Chinese markets. With trading on a single platform, SGX offers its clients portfolio margin offsets across asset classes. For example, SGX CNH futures enjoys 35 per cent margin offsets with FTSE China A50 and 55 per cent with MSCI China Net Total Return.