by winston » Wed Jan 13, 2016 6:23 am
Yuan contracts soar
Charles Li Xiaojia, chief executive of Hong Kong Stock Exchanges and Clearing (0388), said yesterday its yuan currency futures contracts hit a record open interest level of 29,352 contracts on Monday, due to the recent volatility in the mainland currency.
Li wrote on his blog that the futures, launched by the local bourse operator in 2012, saw turnover hit 6,425 contracts the second highest ever. This was worth a notional value of US$625 million (HK$4.85 billion) on January 7.
HKEx plans to roll out a range of new yuan- risk-hedging products, including currency-pair and precious metals products in both yuan and the Hong Kong dollar.
"With price fluctuations in the offshore market more intense than in the onshore market nowadays, there is more need for exchange rate risk management in the offshore market," Li wrote.
He said the yuan exchange rate and interest rate products will "not only help the yuan further internationalize and gain influence, but also build the yuan ecosystem in Hong Kong."
The SAR can benefit from the weakened yuan by providing a variety of debt products "as a weakening currency is in the borrower's favor."
Source: The Standard
It's all about "how much you made when you were right" & "how little you lost when you were wrong"