Derivatives linked to both Chinese A shares and index-related structures have started to grab investors' attention as more entities market a wider range of instruments. "The China story is still hot," said Nicole Yuen, head of China equities at UBS in Hong Kong. Clients have been building up positions in selected stocks via market access derivatives because they are becoming familiar with the documentation and outlook for the newly accessible A share market, Yuen added.
Nomura International plans to add its name to the list of firms offering market access derivatives in the coming months, according to an official. It already trades A shares.
Additionally, the opening of the market to qualified foreign institutional investors is creating demand for index-linked products, such as structures based on the FTSE/Xinhua series of indices, including the China A All-Share Index. "Before these products were esoteric but now it's normal to get requests," said James Rodríguez de Castro, managing director in global equity linked products at Merrill Lynch in Hong Kong.
