China watchers are readying for the expected launch of index futures in the coming months, which should give a boost to over-the-counter products. Winston Wenyan Ma, author of Investing in China- New Opportunities in a Transforming Stock Market, based in New York, said following the launch of stock index future products in the coming months on the Shanghai Financial Derivatives Exchange, a stock shorting mechanism may be permitted. With futures and stock shorting in place, market officials said it will be easier for dealers to structure OTC products offshore and hedge them locally.
Global houses have been offering simple market access products on Chinese equities using their qualified institutional investor quotas. A futures market, however, could allow for a wider array of instruments. "I think the market will see lots of interesting new products in the second half of the year," added Ma.
