Vertical integration, asset classes diversification and increased business from mainland China form the basis of Hong Kong Exchanges and Clearing's (HKEx) new three-year plan.
The plan was made public Tuesday, with Charles Li, director and chief executive of HKEx, revealing it plans to offer an extensive range of equities derivatives products across Hong Kong and Mainland underlying securities, rolling out a range of cross-market and A-share-related instruments, as well as improve volumes by revamping its stock options market and introducing after-hours futures trading.
The exchange will also introduce new fixed income and currency (FIC) products and try to achieve vertical integration within each asset class from products through to trading and clearing.
The new FIC strategy is driven by the increasing internationalisation of renminbi and global regulatory changes, which are likely to increase demand for the asset classes.
The exchange will initially launch on-exchange RMB futures while continuing to explore other product opportunities, such as bond index products and RQFII exchange-traded funds (ETFs) on bonds. Leveraging the growing trend towards central clearing of swaps, HKEx's OTC derivatives clearing house will provide clearing services initially for interest rate swaps and non-deliverable forwards in renminbi and other currencies, branching out later into other FIC products.
HKEx's core cash equity business will continue to grow with additional China and international listings and by expanding access products such as ETFs - particularly in renminbi. The bourse will also continue to try and achieve a breakthrough in mutual market access via partnerships with Mainland counterparties.
The exchange said it was also looking to consolidate and further modernise its "currently diverse trading and clearing platforms" and build greater connectivity with local, Mainland and international market communities.
Li said the exchange would also seek further improvement in its secondary market microstructure and implement the scripless market.
HKEx's strategic plan for 2013-2015 builds on the bourse's growth-oriented strategy of the past three years, which included the upgrading of its infrastructure and capitalising on the internationalisation of the renminbi.