Hang Seng Indexes Company announced that futures contracts on the Hang Seng Biotechnology Index will commence trading on November 28 (pending regulatory approval), further expanding the range of index futures products based on the Hang Seng Index series. The futures contract is still subject to regulatory approval.
Futures on the Hang Seng Biotechnology Index focus on one of the fastest-growing and most dynamic sectors, providing the market with targeted risk management tools. This complements HKEX’s (00388.HK) existing biotechnology-related products and flagship equity index derivatives portfolio.
The Hang Seng Biotechnology Index had surged by 112% year-to-date as of October 8, although it has since retreated somewhat. Nevertheless, it continues to outperform the 34% gain in the Hang Seng Composite Index. As of the end of October, the one-year annualized volatility of the Hang Seng Biotechnology Index stood at 39.4%, higher than the 35.2% for the Hang Seng Tech Index and 24.2% for the Hang Seng Composite Index. Therefore, the introduction of futures on the Hang Seng Biotechnology Index provides market participants with a new tool for managing risks within a relatively high-volatility sector.
