Hong Kong Exchanges and Clearing Limited (HKEx) announced Thursday it is ready to trade futures and options on the FTSE/Xinhua China 25 Index (FXI China 25) on May 23.

The exchange said it has signed an agreement with FTSE Xinhua Index Limited which enables HKEx to introduce these products. FTSE Xinhua Index is a leading China index provider established by FTSEGroup and Xinhua Finance.

The FXI China 25, a tradable index designed to serve as a base for derivatives and other financial instruments, tracks the performance of the 25 largest and most liquid Chinese mainland enterprise stocks (H shares and red chips) listed in Hong Kong. Each constituent's weighting in the index is free-float adjusted and capped at 10 percent, and frequent reviews ensure the index remains a true reflection of the market.

The FXI China 25 Futures and Options will complement the wide range of mainland related products currently trading on HKEx's securities and derivatives markets. These include the nearly 200 H-share and red-chip companies listed on exchange, stock futures and stock options on individual H shares and red chips, H-shares IndexFutures and H-shares Index Options.

"This agreement allows us to build on our strength as the premier international marketplace for mainland-related securities and derivatives," said HKEx Chief Operating Officer Patrick Conroy.

"These products are an important contribution to investors in the mainland related markets because they allow them to hedge investments in the cash markets in a way that was not possible before," said Fredy Bush, Co-chairman of FXI.

Source: Xinhua