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        Top Biz News

        Investors keen on new index futures

        By Wang Ying (China Daily)
        Updated: 2010-02-23 09:28
        Large Medium Small

        SHANGHAI: The new kid on the futures block seems to have got off to a great start, going by the early responses from investors.

        For many like Yao Shanliang, a 63-year-old retired metal trader, the opportunity to trade in stock index futures was something that they did wish to slip out of their hands. Yao drove two hours from his home in Zhangjiagang in Jiangsu province to Shanghai yesterday to be one of the first investors to register for trading in index futures.

        "I've waited for three years for this opportunity," he said. Yao first heard of the government proposal for the China Financial Futures Exchange (CFFEX) in 2008.

        "I started to invest in commodity futures in 1998. During the first few years, I lost a lot of money due to wrong bets. But I think that's the price investors have to pay before making money," said Yao.

        The CFFEX has set a threshold of 500,000 yuan as the minimum deposit for a single exchange account. In addition, eligible investors are required to have conducted mock trading in index futures for at least 10 trading days along with at least 20 transactions. Alternatively they must have conducted at least 10 transactions in commodities futures markets over the past three years.

        Related readings:
        Investors keen on new index futures Blue chips, others to benefit from index futures
        Investors keen on new index futures China launches stock index futures trading accounts
        Investors keen on new index futures China approves final rules for index futures
        Investors keen on new index futures A look into planned?launch of index futures

        According to Chen Zhiwei, general manager with Zheshang Futures in Shanghai, quite a few applicants were rejected as they did not have futures-related experience.

        "We have been waiting for such an instrument since 2006," said Chen Shaochun, an individual investor who applied for an account yesterday.

        "Index futures will help to cushion risks in the stock market, especially for institutional investors, who would like to diversify their portfolio," he said.

        "Only six investors got the nod on Monday. This indicates that the entry requirements are very high," said Chen Zhiwei.

        The newly launched instrument did not add much spice to the stock market as the market barometer edged down 0.49 percent to 3003.40 yesterday, while the Shenzhen Component Index shed 0.74 percent to 12213.54.

         

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