CME announced plans to launch a new futures contract based on the S&P Asia 50 Index, the only Pan-Asia equity index that tracks the 50 largest stocks traded in Hong Kong, Korea, Singapore and Taiwan.
The new CME S&P Asia 50 futures contract is expected to launch in the first quarter of 2006 exclusively on the CME Globex electronic trading platform. This contract is designed specifically to help investors hedge financial risks associated with movements in the region’s equity markets. It is also the first contract to be launched by CME since it agreed last month to extend and expand its existing exclusive licensing agreement with Standard & Poor’s through 2016, with another non-exclusive year in 2017.
“As a result of CME and Standard & Poor’s long and successful alliance, since 1982 when we launched our full-size CME S&P 500 futures contract, today more than 90 percent of all U.S. equity index derivatives trading takes place at our exchange,” said CME Chairman Terry Duffy. “We are pleased to again partner with Standard & Poor’s to further extend our international focus with the introduction of this new product serving the Asian region.”
“Since its introduction in 2003, the S&P Asia 50 has been a favorite with issuers of financial products because it is an effective measure of equity performance in four Asian economic powerhouses — Hong Kong, Korea, Singapore and Taiwan,” said Robert Shakotko, Managing Director of Standard & Poor’s Index Services. “This new CME futures contract is sure to reinforce this trend, particularly in Asia and Europe, as well as streamline hedging strategies for pan-Asian equity portfolios.”
The S&P Asia 50 is a large cap, free float adjusted index. Constituents are selected on the basis of size, liquidity, sector and country representation.