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HKEX launches 5-year China bond futures in Hong Kong
The new contract is sized at 500,000 yuan, with a low minimum margin requirement of 7,980 yuan per contract.
Hong Kong Exchanges and Clearing will begin trading 5-year China government bond futures in Hong Kong for the first time on Monday, aiming to give international investors a low-cost way to hedge risk in their Chinese treasury-bond holdings, according to SCMP Economy.
HKEX said the new contract size is 500,000 yuan (US$74,051). It also set a low minimum margin ratio, meaning investors need to put up 7,980 yuan to trade one contract.
HKEX executives said they have already seen strong interest from offshore institutions after contacting a wide range of international investors. Kevin Fan, HKEX’s head of fixed income and currency product development, said many of those institutions have been actively trading in the onshore Chinese bond market.
SCMP Economy reported that the onshore Chinese bond market reached 200 trillion yuan as of June, with foreign investors holding 3.2 trillion yuan at the end of March, or 1.6 percent of the total. The futures are intended to allow international investors without QFII quotas to trade in Hong Kong, either to hedge or to invest, the outlet said.