HKEx set to extend product range this week

HKEx will reveal new product launches as part of three-year plan released this week.

Hong Kong exchange (HKEx) is set to outline new connect schemes and commodities and yuan products in its three-year plan on Thursday.

HKEx launched a scheme connecting shanghai and Hong Kong markets in November 2014. Connect schemes allow Hong Kong to act as a gateway for international investors to access mainland stocks, derivatives, bonds and commodities markets.

According to a survey by the Hong Kong Investment Funds Association (HKIFA), 90% of fund managers want to see the Shenzhen-Hong Kong stock connect as the next cross-border scheme.

Bruno Lee, chairman of the HKIFA said earlier this month: “In Shenzhen, Premier Li Keqiang flagged the idea of establishing a stock trading link program between Hong Kong and Shenzhen.  The industry warmly welcomes this initiative; and would very much look forward to providing inputs so as to enable it to achieve major success. 

However, as volatility unsettles markets in Asia, HKEx do expect delays in launching the stock connect scheme.

As part of the three-year plan, HKEx hopes to aggressively expand its commodities products and establish trading of commodities between London, mainland China and Hong Kong, according to reports in the South China Post.

Introduction of more yuan products is also expected as HKEx aims to meet the needs of international traders wanting to hedge their risks in the currency market.

In 2012, HKEx acquired the London Metal Exchange (LME) and six new metal products were launched on the exchange, but only three are actually trading at present.

Christopher Cheung Wah-fung, the legislator representing Hong Kong’s brokers, spoke positively about the introduction of new connect schemes and commodities and yuan products on HKEx.

“More products for investors and more connect schemes will bring more business opportunities for Hong Kong brokers and investors,” he said. “It is unlikely all the products will be successful from day one, but it is good for HKEx to try something new.”