China's 'big step' on futures may boost investments
Sunday, 10 January 2010
SHANGHAI, Jan 9 (Bloomberg): China took a "big step" toward opening its capital markets by approving stock index futures, paving the way for increased investment in the world's fastest-growing major economy, according to Invesco Ltd.
The China Securities Regulatory Commission said yesterday it may take three months to complete preparations for index futures, agreements to buy or sell an index at a preset value on an agreed date. The government also approved margin trading and short selling, when investors seek to profit from declines in shares, according to a commission statement on its Web site.
"They're taking a big step forward in developing their capital markets and allowing people to express their positive and negative views on stocks," said Diane Garnick, a New York- based investment strategist at Invesco, which invests in China as part of its Asia Pacific business that had $26.8 billion of assets as of Sept 30. "You'll have more people participate in the market and thus greater efficiency."
Increased investment in Chinese equities may help narrow the gap between prices of shares traded in both Hong Kong and the mainland, said Jeff Papp, a senior analyst at Lisle, Illinois-based Oberweis Asset Management Inc.
The China Securities Regulatory Commission said yesterday it may take three months to complete preparations for index futures, agreements to buy or sell an index at a preset value on an agreed date. The government also approved margin trading and short selling, when investors seek to profit from declines in shares, according to a commission statement on its Web site.
"They're taking a big step forward in developing their capital markets and allowing people to express their positive and negative views on stocks," said Diane Garnick, a New York- based investment strategist at Invesco, which invests in China as part of its Asia Pacific business that had $26.8 billion of assets as of Sept 30. "You'll have more people participate in the market and thus greater efficiency."
Increased investment in Chinese equities may help narrow the gap between prices of shares traded in both Hong Kong and the mainland, said Jeff Papp, a senior analyst at Lisle, Illinois-based Oberweis Asset Management Inc.