Published On: Sun, Oct 20th, 2013

ASX Launches Futures Over the Resources and Financial Sectors

ASX Deputy CEO, Peter Hiom

ASX Deputy CEO, Peter Hiom

On 14 October ASX launched futures contracts over the S&P/ASX 200 Resources Index and the S&P/ASX 200 Financials-x-A-REIT Index. Resources and financial companies make up the two largest sectors in the Australian market and each provides their own investment opportunities. The launch of the new sector futures will enable market participants to tailor theirtrading, hedging and exposure to these specific segments of the Australian market.

Dedicated market makers will provide liquidity for both new futures contracts and the new contracts will be listed alongside the current ASX SPI 200TM contract. ASX Deputy CEO Peter Hiom said: “The launch of sector derivatives enables our customers to isolate and manage exposure in a more targeted and precise manner than is currently possible. It will also provide additional trading opportunities against the benchmark ASX SPI 200TM futures contract, which provides broader exposure to the largest 200 ASX listed companies across multiple sectors.”

“ASX’s decision to launch sector futures over the S&P/ASX 200 Resources Index and the S&P/ASX 200 Financialsx-A-REIT Index makes sense as both indices enjoy significant profile within the Australian market, functioning as both benchmarks for their respective sectors and the physical underlying to exchange traded products,” says Guy Maguire – Head of S&P Dow Jones Indices – Australia.

S&P/ASX 200 Sector Futures – S&P/ASX 200 Resource Index Futures and S&P/ASX 200 Financials-x-A-REIT Futures:
* A futures product is a financial derivatives contract obliging the buyer to purchase the futures contract or the seller to sell the futures contract at a predetermined future date and price.
* Futures over the S&P/ASX 200 Resources Index provide exposure to companies from the S&P/ASX 200 that are classified as belonging to the energy sector or the metals and mining industry.
* Futures over the S&P/ASX 200 Financials-x-A-REIT Index Futures provide exposure to the financial sector, with the exception of those companies that are classified as Australian Real Estate Investment Trusts (A-REITs).
* Sector Futures enable users to efficiently tailor a portfolio’s exposure to a sector by going over or under weight in these two major sectors in relation to the broader market.
* Sector Futures offer potential arbitrage opportunities between sector futures and sector exchange-traded funds (ETFs) or baskets of stocks.

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