New products ignite futures
( 2002-03-19 09:56 ) (1 )

A number of new products are expected to be introduced this year to reignite China's futures market, said senior officials with the China Futures Association (CFA).

Priorities on the association's work agenda include much-heralded financial products -- the stock index futures and State-bond futures -- as well as commodity futures, such as futures of oil, white sugar, rice, wire and corn products.

However, the first product to be introduced this year will be soybean products, expected to be shortly launched at Northeast China's Dalian Futures Exchange.

The newly designed soybean futures, different from the current product on trading for domestic soybeans, is mainly designed for the trading of imported genetically modified organism (GMO) soybeans in line with China's World Trade Organization (WTO) entry, which is likely to bring huge soybean imports in the coming years.

"We are striving to kick off the product as soon as possible as it will not demand an approval from the China Securities Regulatory Commission (CSRC), since non-GMO soybeans have already got approval," said Guo Xiaoli, deputy general manager of the Dalian Futures Exchange.

He also revealed that the exchange has got initial approval from the CSRC for the launch of corn futures, which may also become one of the next products to be kicked off.

Peng Junheng, vice-general manager of the Shanghai Futures Exchange, said the detailed plan for the launch of the stock index futures and oil futures have already been completed in the exchange and filed to CSRC for approval.

"What we are doing now is waiting for the green light from the regulatory authorities," Peng said on Saturday.

As an necessary tool to safeguard investors' interests, the debut of the stock index futures is expected to play a vital role in stabilizing and improving China's shaky equity market system and stave off possible financial risks at the advent of fluctuations in the market.

"Although I cannot figure out a clear timetable for such an important product, I am very confident it will get the go-ahead very soon," Peng said.

"We expected that the total trading volume of the market is to double in the coming five years," said Tian Yuan, president of the CFA.

China's futures sector suffered dismal trading in the late 1990s, as the country strived to clean up the market following a rapid but random growth earlier in the decade.

But it saw a cautious rebound last year.

"The trading volume regained a growing momentum last year and surpassed that of the historical high in the 1990s," said Guo, adding the trading volume of Dalian Futures Exchange accounts for two-thirds of the country's total in its three exchanges, which also include Shanghai Futures Exchange and Zhengzhou Futures Exchange.

Guo said his exchange is also expected to see the debut of the State bonds futures this year, following two years of research.

As an old product in China's futures market, State bond futures saw an ill-fated skyrocketing growth in the early 1990s but the trading was later suspended in line with the decline of the whole market in the late 1990s.