China firm launches futures ETF product in Frankfurt

Frankfurt-based China Europe International Exchange listed its first futures product on Monday, in a move to broaden its product portfolio and providing international investors with more choices in how they buy into the China growth story.

The product is called Futures on db x-trackers Harvest CSI300 Index ETF. It is futures contracts on the db x-trackers Harvest CSI300 Index Exchange Traded Fund which giveinvestors returns linked to a basket of 300 large Chinese companies listed in Shanghai and Shenzhen.

Compared to a physical ETF, futures ETFs give investors the extra benefit of being able to hedge their China-related investment positions.

The db x-trackers Harvest CSI300 Index ETF, managed by Deutsche Bank and Hong Kong-based Harvest Global Investment, is modeled to fully replicate the CSI300 index, which covers 300 large Chinese stocks listed in Shanghai and Shenzhen.

This futures product adds to CEINEX’s existing portfolio of 16 physical ETFs and more than 100 bonds, most of which give foreign investors opportunity benefit from growth in China’s stock and bond markets.

As a futures product, it has four delivery dates throughout the year: in March, June, September, December. It is denominated in euros.

Chen Han, co-chief executive of CEINEX said this new product helps CEINEX to advance its market offerings and “become a fully fledged securities and derivatives market place for offshore RMB and China-related financial instruments”.

CEINEX is a joint venture between Deutsche Börse, the Shanghai Stock Exchange, and the China Financial Futures Exchange.

Chen said CEINEX’s bonds and ETFs are already trading successfully.

He said: “Starting our derivatives market today is a milestone for CEINEX, we are now looking forward to introducing more innovative products in the near future.”

Michael Peters, deputy chief executive of Eurex Frankfurt AG, said: “Launching this new product is the first step toward a broadChina-related derivatives offering. Currently, we are exploring further possibilities of financial derivatives based on China related underlyings.”

To further broaden derivative products relating to China investment opportunities, the exchange is already planning for the introduction of options contracts on the same underlying ETF as the next step.