China's futures market will be developed actively, but with
caution, while the planned introduction of index futures should not
disturb the stock market's performance, said the China Securities
Regulatory Commission's Chairman Shang Fulin yesterday during a
forum.
"China will further diversify futures products and improve the
risk control mechanism to create stable development in the futures
market," Shang said during the 2007 China Finance Forum.
He also demanded adequate preparations for the launch of index
futures, which has long been anticipated. It will allow investors
to sell short on China's stock markets for the first time.
China has completed systematic and technical preparations for
introducing index futures, Shang told Xinhua news agency in
October.
However, the launch of index futures has been postponed several
times due to worries over its influence on a stock market presently
in a correction period, industry analysts said.
The index futures might be launched early next year, according
to a research report published by the Shanghai Stock Exchange
earlier this month.
Domestic stock markets should also prepare for more integration
with international markets, Shang said.
"The ties between China's capital market and those elsewhere
have become closer. China should improve the infrastructure of its
capital markets to prepare for further integration," Shang
said.
He said this includes the increase of direct capitalization and
the establishment of a multi-layered market which offers
diversified products.
China's double-digit economic growth in recent years and
people's bulging interest in investments have fueled the expansion
of the country's stock market.
By the end of November, the market value of the two mainland
bourses in Shanghai and Shenzhen topped 29 trillion yuan (US$3.9
trillion), with about 136 million people holding accounts.
In the first eleven months, the daily turnover on China's stock
market hit 193.4 billion yuan. Accumulated turnover on the futures
market reached 643 million yuan during the same period.
(Shanghai Daily December 26, 2007)
