China ready for its Futures

Some updates regarding China’s implementation of stock index futures and share margin financing. Both these issues have been circulating in the market since early this year.

Stock Index Futures-Thomson News: China has completed all necessary preparations for the launch of stock index futures, the official Xinhua news agency reported, citing a senior securities regulator.“After two years of careful preparation, all the work is ready,” Xinhua quoted Fan Fuchun, vice chairman of the China Securities Regulatory Commission, as saying at a financial forum in Shanghai.

Stock and Margin Financing- Caijing News: Despite two years of regulatory planning and market speculation, China still has no agenda for addressing potentially risky stock and margin lending. A government official said under condition of anonymity that “a pilot project will not be adopted.” But the official also hinted that stock and margin lending could have a future in China, noting risk control would be a top priority, participants would be strictly selected and only first-tier securities firms may qualify. Lenders should have high credit ratings, the official added, and fund management firms would be barred.


MyTake: To be an international financial market, China must definitely incorporates both futures trading, share margin financing and other forms of trading into its market. It will be interesting to find out what are the rules and requirements proposed by the Chinese Authorities. As China started its financial markets very much latter than most other countries, it is imperative for them to take the best of available standards while improving them further to suit their market environment.

* A "watched" phone doesn't ring, so go back to sleep! What a lousy day at work today. Clients and market players are getting impatient and loosing confidence towards the market by the day. The KLSE CI finishes down 14 points or down 1.07% at 1,261 with a paltry volume of 400m shares. Losers outnumber winners by 2:1. Contrastingly, the Shanghai Stock Exchange went up 83 points or 2.5% at 3,459.

* Maybank’s CEO was ‘grilled” by Members of Parliament today with regard to the bank’s high acquisition price for Indonesian bank BII.

* SHKP’s Chairman Walter Kwok was outsted yesterday. The company named the Kwok brothers' mother as the new Chairman of the company. "Mother knows best" I supposed but I believe the saga has not ended just yet. (discussed here previously).

* Did our Government used its emotion rather than careful thoughts before implementing the “No petrol and diesel sale” for foreign registered cars within the 50km radius of ours/neighbouring countries' borders? Are the subsidies saved more than the foregone spending by foreigners on shopping/entertainment/food/investments etc if they decided not to come here?

* Still on fuel. Hundreds of truck drivers protested in the UK yesterday. Diesel now cost an average of 1.28 pound in the UK. Did you know that the fuel taxes in the UK made up about 63% of the cost of fuel?