SHANGHAI/HONG KONG, March 11 (Reuters) – Global index publisher MSCI and the Hong Kong stock exchange said on Monday they will launch futures contracts on the MSCI China A Index to provide a hedging tool as international investor interest in Chinese mainland shares surges.
The announcement, made by the Hong Kong and Clearing Ltd (HKEX) on Monday, came less than two weeks after MSCI announced it would quadruple the weighting of Chinese shares in its global benchmarks later this year.
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“With the evolution and sophistication of China’s securities markets, we continue to see increasing participation of global investors who are demanding tools to enhance their risk management capabilities,” Henry Fernandez, MSCI’s Chairman and Chief Executive Officer said in a statement.
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The MSCI China A Index will comprise 421 large and mid-cap China-listed A-shares, representing the mainland portion of the MSCI Emerging Markets Index
HKEX Chief Executive Charles Li said in the same statement that the agreement will “facilitate the development of a key risk management tool for international investors who need to manage their A-share equity exposure.”
Fang Xinghai, deputy head of China’s securities regulator, predicted foreign capital inflows to Chinese stocks this year will double to about 600 billion yuan ($89.76 billion) from last year. (Reporting by Samuel Shen and Noah Sin; Editing by Sam holmes)