The stock index futures launch ceremony has taken place in Shanghai. The event comes after four years of extremely careful preparations, representing a giant step by China in the development of its capital markets.

 

The leaders of the securities regulator, as well as the city of Shanghai, celebrated the stock index futures launch on Thursday afternoon. Their revelry ended years of preparations that signaled policy indecision over the controversial financial derivatives designed for risk-hedging, but also seen as vulnerable to speculative forces.

But this is just a ceremony. The real trading will start on April 16th, at the China Financial Futures Exchange, on four kinds of contracts based on the CSI 300 Index.

Shang Fulin, Chairman, China Securities Regulatory Commission, said, "The launch is a big step in China's stock market development."

Tu Guangshao, Shanghai Deputy Mayor, said, "The launch shows the State Council's commitment to enhancing Shanghai's position as the nation's financial center."

The new trading scheme will give investors a means to bet on the direction of major share indexes, and also allow them to make money when the market falls.

Morgan Stanley predicts that the move may increase equity transaction volumes by 50 percent, allowing China to surpass the US as the world's busiest stock market.