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H-shares Index Futures Launch Date : 8 December 2003

H-shares Index Futures Launch Date : 8 December 2003. Why Launch H-shares Index Futures?. To meet market demand created by the rapid growth in H-shares market and the anticipated trend of China enterprises to be listed in the form of H-shares

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H-shares Index Futures Launch Date : 8 December 2003

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  1. H-shares Index FuturesLaunch Date : 8 December 2003

  2. Why Launch H-shares Index Futures? • To meet market demand created by the rapid growth in H-shares market and the anticipated trend of China enterprises to be listed in the form of H-shares • To offer an effective trading and hedging instrument for investors to assume and/or manage their risk exposures in China enterprises listed in Hong Kong • To strengthen Hong Kong’s role as the preferred international capital formation centre for Mainland China enterprises by deepening the liquidity of the underlying cash market and OTC derivatives market

  3. HKEx - Market for H-shares • During the period from 1993 to September 2003, H-share companies raised more than HK$150 billion through Initial Public Offerings in HK. • As of 30 September 2003, there were 82 H-shares listed on the Stock Exchange (59 on the Main Board and 23 on Growth Enterprise Market, or GEM).

  4. Investors’ Interest on H-shares H-shares Turnover • Avg Daily Turnover • 2002 HK$581 Mil • * HK$1,449 Mil • + 149% • * Jan – Sep 2003

  5. Underlying Index of H-shares Index Futures HSCEI – Hang Seng China Enterprises Index • Compiled by HSI Services Ltd. • All H-Shares in the Hang Seng Mainland Composite Index • Market cap. weighted index • Comprised of 32 constituent stocks

  6. Performance of HSCEI Year 2003 Return Performance (Up to 30 Sep 2003) HSCEI HSI +61.8% +20.5%

  7. 20-Day Annualised Volatility for HSCEI

  8. HSCEI Market Capitalisation HK$ Billion 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Year 2003

  9. HSCEI Turnover

  10. HSCEI Statistics and Characteristics • Index Level - 3,772 (as of 20 October 2003) • Market capitalisation - HK$236 billion (as of 20 October 2003) • Average daily turnover (Jan – Sep 2003) - HK$1.17 billion, accounting for 13% of total market turnover (Main Board and GEM) • High Volatility (2 Jan – 30 Sep 2003) - 26% Vs 16% (HSI) • Good Return (2 Jan – 30 Sep 2003) - 61.8% Vs 20.5% (HSI)

  11. HSCEI Constituent Stocks(As of 20 Oct 2003)

  12. H-shares Index Futures Contract Specifications • Trading Symbol: HHI • Contract multiplier = HK$50 • Contract value is round HK$185,000 • Minimum Fluctuation: 1 index point • Contract months are the same as HSI Futures - Spot Month, the next calendar month, and the next two calendar quarterly months • Exchange Fee - HK$3.50 • Commission : Negotiable

  13. Questions and Answers

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