UBS Starts China Stock-Index Futures Broker, Bets on Revival

Updated on
  • China futures volume soared in 2015, then plunged amid rout
  • UBS sees demand despite increased cost of trading futures

UBS AG opened a stock-index futures brokerage service in China, betting on a revival in interest after last year’s $5 trillion equity rout.

“Although the cost of trading financial futures has increased since July last year, we continue to see growing demand,” Yaotian Shou, general manager of UBS Futures Co., the unit providing the services, according to an e-mailed statement on Monday.

The brokerage will allow clients to trade on futures on the CSI 300, SSE 50 and CSI 500 indexes as well as treasury futures.

Futures trading soared in China last year as stocks surged to a June peak, then plummeted as regulators cracked down on speculators. The number of contracts changing hands on China’s CSI 300 Index, a gauge of the nation’s biggest companies, was about 13,300 on Monday, compared with 2.3 million at the end of June last year. Trading in financial futures, which includes index and treasury products, rose 154 percent to 418 trillion yuan ($64 trillion) in 2015 from the year before, according to the Chinese Futures Association.

The Zurich-based bank said it launched the service after winning a trading seat on the China Financial Futures Exchange. In May 2014, UBS through its UBS Securities venture in China bought a 95.42 percent stake in a Chinese brokerage that it turned into its futures unit. UBS Securities last month made the brokerage wholly-owned, according to Monday’s statement.

Other foreign financial institutions with Chinese futures brokerages include JPMorgan Chase & Co. and Citic Newedge Futures Co., the joint venture between Citic Group and Newedge Group.

— With assistance by Gary Gao

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