Hong Kong Exchanges and Clearing (HKEx) will offer trading of futures outside of trading hours from 8 April, letting buy-side traders adjust their positions based on events in US and Europe.
Hang Seng index and H-shares index futures will be available for trading from 17.00 until 23.00 in addition to the regular session, while gold futures may also be traded after hours in the near future depending on regulatory approval.
HKEx has also stated the move will lead to greater European and US investors trading in its derivatives market and builds support for HKEx becoming a centre for RMB products.
Under the new rules, after hours trades will be cleared and settled the following trading day. Also, a limit up-limit down price mechanism will bar sell orders with a price below 95% and buy orders with a price above 105% of the last traded price during normal trading times.
In a blog this week HKEx CEO Charles Li reiterated the central tenets of the exchange’s three year plan, including growing its commodities trading offering and broadening its focus on China-based products to attract international investment.
Last year’s acquisition of the London Metal Exchange signalled a bold move for the Hong Kong exchange away from its established businesses.
“The broader connectivity in the equity and commodities markets will almost certainly lead to a sizable, incremental outflow of RMB, making the RMB one of the key investment and trading currencies in the offshore market. This will create significant possibilities in offshore fixed income and currency products in both trading and clearing,” Li wrote in the blog post.