Hong Kong Exchanges & Clearing Ltd., the world’s largest exchange company by market value, said it received regulatory approval to start after-hours futures trading and will begin the service on April 8.
Hang Seng Index and H-shares Index futures will be available for trading from 5 p.m. to 11 p.m. from the date, in addition to regular hours, the bourse said in a statement yesterday. Gold futures will also be considered for inclusion at a later stage, it said.
“I’m all in favor of it,” Andrew Economos, head of sovereign and institutional strategy for Asia excluding Japan at JPMorgan Asset Management in Hong Kong, said in a Bloomberg Television interview. “We want to have more access to markets over a broader swathe of time and across a bigger opportunity set. So we like the opportunity to be able to trade more hours.”
The extended hours will help attract more European and U.S. investors to the city’s derivatives market, and it will also allow market participants to hedge and adjust positions when news breaks in European and U.S. hours, according to the statement. After-hours futures trading will let the bourse cater for international interest in yuan products in the future, it also said.
Representatives from the Hong Kong Securities & Futures Professionals Association, the Hong Kong Securities Professionals Association and the Hong Kong Securities & Futures Employees Union spoke in opposition to after-hours futures trading last month. The plan will place too much of a cost burden on the small brokers to stay open and manage risk during that time, Francis Lun, Hong-Kong based managing director at Lyncean Securities Ltd., said last week.
Hong Kong Exchanges completed its $2.2 billion takeover of the London Metal Exchange in December as it seeks to broaden its business with its first overseas acquisition. The bourse said last month it will start commodities trading and clearing of LME products during Asian hours over the next three years, introduce clearing for over-the-counter commodity derivatives and expand mainland China’s participation in the exchange.