HKEx to introduce new stock index-linked derivative product

Will be called CES China 120 Index futures or CES 120 .

Hong Kong Exchanges and Clearing Ltd said CES 120 was being launched amid ongoing efforts to enhance financial cooperation between the mainland and Hong Kong.

The CES 120 futures contract was designed to track the performances of the largest and most liquid Chinese stocks trading in both Hong Kong and the mainland.

The contract, which is set to become the financial market's first exchange-traded futures derivative linked to both A-shares and H-shares, is slated to start trading on July 8 following regulatory approval.

The product is expected to give institutional investors a new tool to minimize the risks facing their Chinese equity holdings. It is also billed as another step toward deeper financial ties between the mainland and Hong Kong.

It was designed by China Exchanges Services Company, Ltd, a joint venture between HKEx and stock exchange operators in Shanghai and Shenzhen.

HKEx CEO Charles Li said the launch of CES 120 will be a milestone in their equity derivatives strategy of building on current business and offering an extensive product suite across Hong Kong and the mainland.

HKEx also said it intends to roll out futures contracts for three A-share exchange traded funds on June 10 pending regulatory approval. This is another attempt to give local investors more options when it comes to mainland-related securities derivatives.