China Index Futures Hit Record as Traders Look to Gain Exposure

(Bloomberg) -- With China out for a weeklong holiday, traders have turned their attention to futures listed in Singapore and Hong Kong.

The number of outstanding contracts on the SGX FTSE China A50 Index has surged to a record 1.2 million with the market shut since the Golden Week holiday started last Tuesday. Similar contracts listed in Hong Kong had an 18% gain in open interest, though the total is fewer than 16,000 futures and nowhere near a peak.

“The robust trading volumes reflects global investors managing their China exposure and positioning themselves before the cash market reopens,” said Ding Meiyan, head of equity-derivatives product management at SGX Group.

The China A50 Index closed at its highest level since January 2023 on Sept. 30, following its best day in almost 16 years after the nation announced a series of measures to boost its economy. Since then, traders have used instruments around the world as China proxies before the market resumes trading on Tuesday.

While many global fund managers and strategists remain skeptical about the rally, the Hang Seng China Enterprises Index in Hong Kong has climbed 11% this month and is trading at its highest level since February 2022.