A volatile Hang Seng Index last month encouraged investors to buy more warrants than callable bull/bear contracts, breaking a trend that had seen nearly the same level of trading for the two derivative instruments in the second half of 2009, the Royal Bank of Scotland said.
Warrants, in terms of turnover, came out far ahead of CBBCs in January, said Lisa Leung Lai-shan, director of equity derivatives and private investor products sales at RBS.
Total warrants traded amounted to HK$192.6 billion last month, accounting for 12.4 percent of main-board turnover while CBBCs took in HK$121 billion, commanding 7.8 percent. From August to December both warrants and CBBCs accounted for about 10 percent each of main-board turnover. Leung expects the HSI to be volatile in the short term - moving between 19,600 and 20,800.
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In the mainland, RBS sees roaring trade in stock index futures, which launch next month. "China will become one of the largest stock index futures market, and this will help boost liquidity," said Matthew Wong, head of equity derivatives and private investor products sales at RBS.
Wong expects mainland stock index futures to have a daily trading volume of 200,000 to 300,000 contracts as opposed to Hong Kong's 60,000 to 90,000 contracts.
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