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China says no stimulus exit yet despite growth
October 26, 2009--China’s economic growth is likely to speed up this quarter, but the government will stay the course on its fiscal stimulus and loose monetary policy, senior officials said on Monday.
Despite the emphasis on policy continuity, an unmistakable shift towards greater optimism in China’s official rhetoric has led analysts to conclude that Beijing is thinking about how to start unwinding its ultra-loose pro-growth policies. Restating the thrust of a cabinet statement issued last week, Vice Premier Li Keqiang said the economy had performed better than expected and its recovery was now on solid ground.
RTS Index futures record exceeds 1 million volume
October 23, 2009--On October 22, 2009 the market participants completed a record number of trades on FORTS, RTS’s derivatives section – 511,263. The previous record was set on October 21, 2009, when the number of trades reached 491,882. The largest block of trading was in the flagship RTS Index contract, which recorded 330,434 trades.
The new record for trades was driven by a new record for contract volume, with 1,000,330 contracts traded on the day with a value exceeding USD2.8 billion.
The previous record high of 933,472 contracts comprising 313,465 trades for a value of USD2,671,592,654 was seen on October 21, 2009.
The RTS Index futures started trading in August 2005. In two years it became the most liquid instrument of the Russian equity market. According to the rating issued by the Futures Industry Association based on the results of the first half of 2009 the RTS Index futures entered top ten most liquid instruments on indices worldwide.
Japan FSA extends temporary measures regarding restrictions on short selling and purchase of own stocks by listed companies
October 23, 2009--1.The following regulatory measures on short selling are currently in place, with regard to all listed stocks in Japan:
1) An "uptick rule requirement" which prohibits, in principle, short selling at prices no higher than the latest market price;
2) Requirements for traders to verify and flag whether or not the transactions in question are short selling; and
3) Request the exchanges to make daily announcements on their aggregate price of short selling regarding all securities and aggregate price of short selling by sector (The announcements have been made sequentially since October 14, 2008).
In addition, the Financial Services Agency (FSA) has put in force the following measures, as temporary measures effective until October 31, 2009
1) Naked short selling (short selling in which stocks are not borrowed at the time of selling) is prohibited (effective since October 30, 2008); and
2) Holders of a short position of a certain level or more (in principle, 0.25 percent or more of outstanding issued stocks) are required to report to exchanges through securities firms. Exchanges are required to publicly disclose such information (effective since November 7, 2008).
2. Regarding the purchase of own stocks by listed companies, taking into consideration the of situation Japan's capital markets, the following restrictions have been temporarily relaxed over the period from October 14, 2008, to October 31, 2009.
1)Upper limit on the daily purchase volume
The limit will be raised from the current 25% to 100% of average daily trading volume during the four weeks immediately preceding the repurchase.
2)Timing of purchase
Companies are currently required to repurchase their own stocks during hours other than the 30 minutes immediately before the close of trading. This restriction will be lifted.
3. The FSA decided to further extend these temporary measures until January 31, 2010. To this end, the Cabinet Office Ordinances and FSA Regulatory Notices necessary for these extensions will be promulgated before expiry of these measures by the end of October, 2009.
Contact:
Financial Services Agency
E-mail: foreignpr@fsa.go.jp
Status Report on New Product and Market Development Initiatives
(Status as of 16 October 2009)
October 23, 2009--
The following initiatives are subject to market support and regulatory approval so they may not be implemented. HKEx will announce further details of these initiatives as they progress.
|
Initiative |
Status on |
Status on | ||
|
1. |
Consultation on Periodic Financial Reporting |
The Listing Committee proposes to consider this issue further towards the end of this year. |
The Listing Committee proposes to consider this issue further at its policy meeting in November this year. | |
|
2. |
Combined Consultation on Proposed Changes to the Listing Rules
|
Consultation conclusions for the three remaining issues under assessment will be published in due course. The Listing Committee and Stock Exchange Board have approved the consultation conclusions and rule amendments relating to self-constructed fixed assets will be published shortly, subject to the Securities and Futures Commission's ( |
The consultation conclusions and rule amendments relating to self-constructed fixed assets and general mandates were published on 31 July and 9 October this year respectively. The consultation conclusions in respect of the one issue that remains under assessment (public float) will be published in due course. | |
|
3. |
Review of Chapter 18 of the Listing Rules |
Market consultation materials were considered on a preliminary basis by the Listing Committee. Now proceeding to the drafting stage. |
The Consultation Paper on New Listing Rules for Mineral and Exploration Companies was published on 11 September this year and the deadline for submissions is 11 November. | |
|
4. |
Consultation on Proposed Changes to Filing and Checklist Requirements for Listing of Equity Securities |
The consultation paper was published on 26 June this year. The deadline for submissions is 31 August. HKEx is streamlining its listing process. |
The consultation conclusions were published on 2 October this year and the Rule amendments will come into effect on 2 November. | |
|
5. |
Consultation on Proposals to Accelerate Rights Issues and Open Offers |
Not included in this issue. |
The consultation paper was published on 31 July this year and the deadline for submissions was 30 September. | |
|
6. |
Consultation on Acceptance of Mainland Accounting and Auditing Standards and Mainland Audit Firms for Mainland Incorporated Companies Listed in Hong Kong |
Not included in this issue. |
The consultation paper was published on 28 August this year and the deadline for submissions is 23 October. | |
|
7. |
Consultation on Proposed Amendments to the Listing Rules on Connected Transactions |
Not included in this issue. |
The consultation paper was published on 2 October this year and the deadline for submissions is 2 December. | |
|
8. |
Exploration of New Financial Products / Services and Review of Existing Products / Services |
Options with Flexible Features |
| |
|
Emissions Products |
| |||
|
Volatility Index-related Products |
| |||
|
Narrower Strike Intervals for Options on Low-priced Stocks
|
HKEx plans to narrow strike intervals of stock options under Strike Interval Group B and add a third quarterly expiry month for the 20 most actively traded option classes and Tracker Fund options before year's end, pending regulatory approval. | |||
|
9. |
Provision of Free Real-time Last Trade Prices on Websites |
The free real-time market data to be available through the designated websites now includes nominal prices in addition to last trade prices. Key service terms have been finalised for the most part with the six short-listed candidates (three from the |
The Free Prices Website Service was soft-launched on 5 October this year on six designated websites. The official launch is set for 1 January next year. | |
|
10. |
T+2 Finality for Stock Exchange Trades and Settlement Instructions |
HKEx is seeking informal feedback from certain banks and clearing house Participants on the proposed T+2 Finality model and plans to consult the market by end of the third quarter this year. |
HKEx has completed the soft consultation on the proposed model and plans to issue a consultation paper in the fourth quarter of this year. | |
|
11. |
Admission of Share Registrars as CCASS Participants |
The |
The Scripless Securities Market Working Group, led by the | |
|
12. |
Automation of Stamp Duty Reporting and Payment |
HKEx aims to introduce electronic stamp duty reporting and payment in the first half of next year, subject to market readiness and rule amendments. |
In progress according to plan. | |
|
13. |
|
Not included in this issue. |
HKEx aims to double | |
| Note: |
AMS/3, the Third Generation Automatic Order Matching and Execution System, is the trading system for the securities market. CCASS/3, the Latest Generation Central Clearing and Settlement System, and the Market Data Feed, or MDF, are the other major market systems supporting the securities market. HKATS, the Hong Kong Futures Automated Trading System, is the trading system for the derivatives market. DCASS, the Derivatives Clearing and Settlement System, and PRS, the Price Reporting System, are the other major market systems for the derivatives market. |
|
Information is added after the date at the top of the column from time to time. |
This report is carried in HKEx's quarterly publication, Exchange, published on 23 October 2009.
HKEx to Provide More Choices in its Most Actively Traded Stock Options
October 23, 2009--Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Thursday) that the Securities and Futures Commission has approved the proposed rule amendments for the narrowing of strike intervals in HKEx's stock options market. The changes will be applied to the Strike Interval Group B in Table 1 from 2 November 2009.
Strike Interval Group B now applies to seven stock option classes and there are 10 stock option classes with an additional calendar quarter expiry month for trading. From 2 November 2009, the revised Strike Interval Group B will apply to 20 of the most actively traded stock option classes and Tracker Fund options and all 21 of those stock option classes will have an additional calendar quarter expiry month (see Table 2 below).
The majority of stock option classes will continue to have five expiry months: spot, or current month, the next two calendar months and the next two calendar quarter months (calendar quarter months comprise March, June, September and December). For those with the third calendar quarter month, the expiry months in November 2009 will be: November 2009 (spot), December 2009 and January 2010 (the next two calendar months), and March 2010, June 2010 and September 2010 (the next three calendar quarter months).
"The changes will give market participants more choices," Calvin Tai, HKEx's Head of Derivatives Market, said. "Market participants will be able to find a stock option with a strike price close to the underlying stock's price more easily after strike intervals have been narrowed. Moreover, the addition of a third calendar quarter expiry month will allow market participants to trade longer maturity in the 21 stock option classes and may result in more trading activity."
Stock options are the most actively traded product in HKEx's derivatives market. In the first nine months of this year, the 35,828,701 stock options contracts traded in the market represented about 48 per cent of the total trading volume.
Table 1: Strike Interval Groups for Stock Options from 2 November 2009
|
Underlying Prices |
Strike Interval | |||
|
From |
To |
Group A |
Group B | |
|
From 2 November |
Existing | |||
|
0 |
2 |
0.1 |
0.05 |
0.1 |
|
2 |
5 |
0.2 |
0.1 |
0.2 |
|
5 |
10 |
0.5 |
0.25 |
0.5 |
|
10 |
20 |
1 |
0.5 |
0.5 |
|
20 |
50 |
2 |
1 |
1 |
|
50 |
100 |
5 |
2.5 |
2.5 |
|
100 |
200 |
5 |
2.5 |
2.5 |
|
200 |
300 |
10 |
5 |
5 |
|
300 |
500 |
20 |
10 |
20 |
Table 2: Most Actively Traded Stock Option Classes and Tracker Fund Options (in alphabetical order)
|
|
Strike Interval |
Third Calendar Quarter | ||
|
|
Existing |
From |
Existing |
From |
|
Bank of China Limited |
|
X |
X |
X |
|
Bank of Communications Co, Ltd |
|
X |
|
X |
|
Cheung Kong (Holdings) Limited |
X |
X |
X |
X |
|
China Construction Bank Corporation |
|
X |
X |
X |
|
China Life Insurance Company Limited |
|
X |
X |
X |
|
China Merchants Bank Co, Ltd |
|
X |
|
X |
|
China Mobile Limited |
X |
X |
X |
X |
|
China Petroleum & Chemical Corporation |
|
X |
X |
X |
|
China Shenhua Energy Company Limited |
|
X |
|
X |
|
China Telecom Corporation Limited |
|
X |
|
X |
|
CLP Holdings Limited |
|
X |
|
X |
|
CNOOC Limited |
|
X |
|
X |
|
Hang Seng Bank Limited |
X |
X |
|
X |
|
Hong Kong Exchanges and Clearing Limited |
|
X |
|
X |
|
HSBC Holdings Plc |
X |
X |
X |
X |
|
Hutchison Whampoa Limited |
X |
X |
X |
X |
|
Industrial and Commercial Bank of China Limited |
|
X |
X |
X |
|
PetroChina Company Limited |
|
X |
X |
X |
|
Ping An Insurance (Group) Company of China, Ltd |
|
X |
|
X |
|
Sun Hung Kai Properties Limited |
X |
X |
|
X |
|
Tracker Fund of Hong Kong |
X |
X |
|
X |
BNP Paribas brokerage chief quits in Japan
October 23, 2009--BNP Paribas said its chief Japan representative would resign, after the country’s financial regulator ordered the French bank to suspend trading in its equities and commodities derivatives division for two weeks as a penalty for stock price fixing and lack of internal controls.
The bank said Yusuke Yasuda, who heads its brokerage in Japan, is to step down after the penalty, announced by the Financial Services Agency.
KRX To Open Nighttime Trading Of KOSPI200 Futures On CME Globex
October 22, 2009-The Korea Exchange plans to launch the nighttime trading of KOSPI200 futures after the closing of regular session from November 16, 2009.
The trading hours of nighttime session of KOSPI200 futures, which has been launched in collaboration with US CME Group, are from 18:00 to 05:00 on the following day.
The investors who wish to participate in the nighttime session of KOSPI200 futures need to open a futures trading account (the existing futures trading account may be used) and enter into a service agreement for nighttime trading.
To promote the investors’ awareness, the Korea Exchange is organizing the mock trading sessions and road shows on the trading rules and regulations, how & when to utilize, how to use the dedicated HTS.
Any interested investor is welcome to participate in mock trading session and the dedicated HTS program required for mock trading will be available for downloading from major Korean securities and futures companies from October 23, 2009.
Q3 Trading results Of ETFs on KRX
October 21, 2009--Despite the listing of new ETFs and brisk trading of KODEX China H, the asset under management of ETFs tracking key indices of KRX declined due to shrinking spot-futures basis and the daily trading value and trading volume also fell due to the decline of arbitrage trading.
Daily trading value was KRW 122.8 billion (decline of 10.4% from previous quarter) and daily trading volume was 6,219,000 shares (decline of 2,158,000 or 25.8% from the previous quarter).
* The top 5 ETFs account for 89.0% of total daily trading value.
Daily Trading
| (thou. KRW bil) | |||||
| '09 Q3 | '09 Q2 | '09 Q1 | '08 | '07 | |
| Trading volume | 6.219 | 8.377 | 9.301 | 3.846 | 2.333 |
| Trading value | 123 | 137 | 127 | 98 | 33 |
With over KRW 2 billion of trading value, the daily trading values of 3 of 5 bond ETFs and inverse ETF were ranked from 6th to 9th.
| ETF | Trading value (KRW bil) | |
| 1 | KODEX200 | 61.8 |
| 2 | KOSEF 200 | 24.2 |
| 3 | TIGER 2000 | 10.1 |
| 4 | TREX 200 | 8.0 |
| 5 | KINDEX 200 | 5.3 |
Rate of return
ETFs recorded a high return (around 42%) from the improved performance of bank and automobile shares.
* KOSPI rose 20.4% in the 3rd quarter of 2009.
As the price of semiconductor recovered, semiconductor sector ETF recorded over 30% absolute return during the 3rd quarter.(35.4% by TIGER SEMICON and 32.9% by KODEX SEMICON)
On the bullishness of large caps, KStar Top5 recorded over 25% return, thus becoming one of the top 10 in the rate of return.
Trading of newly listed ETFs
5 bond ETFs and 1 inverse ETF were listed in the 3rd quarter. They traded briskly with the daily trading value of over KRW 1 billion.
Daily trading value of inverse ETF was KRW 2.6 billion. However, considering the price per unit of inverse ETF is 1/10 ~ 1/5 of those of bond ETFs, it can be said that inverse ETF was traded most actively.
The brisk trading of inverse ETF is attributed to the investors who anticipate the market correction in the future as well as the vigorous placing of quotes by the liquidity provider.
Of the 6 newly listed ETFs, only inverse ETF recorded a positive return while all bond ETFs recorded small negative returns. Return rates of bond ETFs remained negative (-0.5~ 0.6%).
Size of ETFs
Net asset value of KRW 3.6777 trillion and total number of listed units of 225.67 million, showing an increase of KRW 1.5557 trillion (73.3%), and 20.73 million units (10.1%) from the previous quarter, respectively.
Net asset value increased due to the increase of ETF prices resulting from the rise of KOSPI value and the listing of 5 bond ETFs (KRW 1.211 trillion) and inverse ETF (KRW 30 billion).
Number of listed ETFs increased by 5 (6 new ETFs; delisting of 1 KOSEF large cap value ETF) and total of 43 ETFs are listed(10 market indices ETFs; 5 bond ETFs; 5 overseas indices ETFs; 10 sector ETFs; 4 style ETFs; 9 other ETFs) as of end of September.
TIGER China ETF listed on The KRX
October 21, 2009--The KRX has listed TIGER China ETF on October 21.
| Index tracked Original listing amount (E)* | Hang Seng Mainland 25 (HSML 25 | ||
| KRW 11 bi | Issue price per unit (E)* | KRW 10,990 | |
* Original listing amount and issue price per unit are determined on the day before the listing date.
Mirae Asset TIGER China ETF to be operated by the Mirae Asset MAPS tracks Hang Seng Mainland 25 composed of 25 Chinese stocks (H shares, R shares and others) listed on the Hong Kong Exchanges & Clearing, including China Mobile.
H shares : Stocks of state owned companies or the companies of which the state owns more than 30% of their equity shares, which are listed in both the main land China and Hong Kong
R shares : Stocks of state owned companies or the companies of which the state owns over 30% of their equity shares, which are listed only in Hong Kong
After listing TIGER China ETF, there are 6 overseas indices ETFs listed on the KRX, thus making total number of listed ETFs 45.
TIGER China ETF is the first ETF tracking HSML 25 Index.
* There are 3 ETFs tracking HSCEI Index in the world.
As the constituents of HSML 25 Index include both the H shares and R shares, including the key Chinese company ‘China Mobile’, it is expected that the price will be stable due to its well diversified portfolio.
In view of such factors as the real-time transaction, low cost and trading convenience, particularly when compared with the China equity funds, it is expected that the investors will find TIGER China ETF and attractive investment instrument.
| Authorized participants | Dae Woo Securities, Mirae Asset, Eugene Investment & Securities | ||
| Liquidity provider | Mirae Asset, Eugene Investment & Securities | ||
| Trustee | KB kookmin Bank | ||
UOB Asset Management Ltd Lists The First China A-Shares ETF On SGX - Singapore Investors Can Now Access The China A-Shares Market With The United FTSE/Xinhua China A50 ETF
Singapore investors can now access the China A-Shares market with the United FTSE/Xinhua China A50 ETF
October 21, 2009--UOB Asset Management Limited (UOBAM) and Singapore Exchange Limited (SGX) announced today that UOBAM will list the first China A-Shares Exchange Traded Fund (ETF) on SGX on 12 November 2009. The United FTSE/Xinhua China A50 ETF will also be the first China A-shares ETF to be denominated and traded in Singapore Dollars.
The unprecedented scale of the financial crisis has left almost no economy untouched. As the developed world faces off potentially low to negative growth rates going forward, prospects of sustainable growth seem distant and fragile. In contrast, the Chinese economy remains firm and resilient as it looks set to launch into a new growth trajectory. The International Monetary Fund (IMF) expects China to grow at a healthy pace of 7.5% in 2009 and 8.5% in 2010.
The China A-Shares market is an important segment of China’s stock market. It consists of shares in Chinese companies which are denominated and traded in the Chinese Yuan, and listed on the Shanghai or Shenzhen stock exchanges. In recent times, international investors have shown keen interest in the China A-Shares market due to the healthy growth of the Chinese economy compared to the developed world, signs of recovery in China’s domestic demand and manufacturing sector, as well as the ascension of Chinese companies which are becoming more competitive on a global scale. Strong retail participation in the China A-Shares market in recent years also implies higher secondary trading liquidity.
Traditionally, access to the A-Shares market in China has been limited to Chinese nationals and Qualified Foreign Institutional Investors (QFIIs) approved by the China Securities Regulatory Commission (CSRC). Now, investors in Singapore and the region can gain exposure to the China A-shares market through the United FTSE/Xinhua China A50 ETF.
The United FTSE/Xinhua China A50 ETF aims to provide performance results that, before fees, costs and expenses (including any taxes and withholding taxes), closely correspond to the performance of the mainland Chinese equity market as measured by the FTSE/Xinhua China A50 Index. The index is designed to represent the equity performance of the 50 largest China A-Shares companies based on market capitalisation.
Commenting on the launch of the ETF, Mr Chong Jiun Yeh, Executive Director, UOBAM, said, “The launch of the United FTSE/Xinhua China A50 ETF marks a milestone for UOBAM. This will be the first China A-Shares ETF to be listed in Singapore and the first ETF to be launched by UOBAM. UOBAM’s core investment philosophy has always been to adopt a bottom-up, fundamentally driven team-based approach to ensure consistent performance, backed by a strong research focus as a key way we provide added value to our investors. Similarly, we have adopted the active value-added approach in structuring unique and non-commoditised ETFs to the marketplace. We chose to develop this China ETF because China is one of the biggest investment stories and we are one of the few players who are privileged to be able to facilitate access for investors into this limited-access market.“
SGX welcomes the expansion of UOBAM into the ETF space, with its first listing on one of the world's fastest-growing and most exciting economies. The United FTSE/Xinhua China A50 ETF will provide a transparent and efficient means for retail and institutional investors to gain exposure to an important and yet restricted segment of China's securities market,” said Mr Chew Sutat, Executive Vice President & Head, Market Development of SGX.
The Initial Offer Period of the United FTSE/Xinhua China A50 ETF will be from 29 October 2009 (9 am) to 4 November 2009 (12 noon). During this period, investors can apply for units of the ETF via UOB ATMs or through the participation dealer, UOB Kay Hian Pte Ltd (either directly or through a stockbroker), subject to applicable terms and conditions. Where an investor is submitting his application to a Participating Dealer through his stockbroker, that investor should contact his stockbroker for the applicable deadline for such submission. The minimum subscription during this period is 1,000 units. Upon listing, the ETF will be quoted and traded in board lots of 100 units.
With the launch of this ETF, SGX will have 43 ETFs covering worldwide equity markets such as Singapore, India, North Asia, ASEAN, United States, Eastern Europe, Latin America and emerging markets as well as commodities, including gold.
