Chinese exchanges eye index futures

With the launch on April 8 by the Shanghai and Shenzhen stock exchanges of a joint benchmark index of China’s top 300 companies, the way will be opened for the trading of index futures at a later date.

Because the Chinese government has not yet approved futures trading with the exception of commodities futures, this will not happen in the near term, but is said that this is possible in the future, especially with the success of the trade there in commodities futures. Chinese equity markets have been seeing hard times recently. The Shanghai composite reached a six-year low last month due to fears that a rapid sale of state shares in listed companies would dilute the worth of investors’ shares. This is a possibility in view of the fact that the Chinese government owns two-thirds of the shares in Chinese companies. The launch of the joint index also may indicate a future merger of the Shanghai and Shenzhen stock exchanges, although it has been said that this would not happen in the next few years at least.

Story link: Chinese exchanges eye index futures