The international derivatives exchange Eurex is launching an equity index future based on the MSCI Japan on 26 October 2009.
The new future will be Eurex’s first derivative based on an Asian equity index.
“The MSCI Japan future extends our existing suite of foreign equity indices, among them the MSCI Russia future”, says Peter Reitz, member of the Eurex executive board. “Nowadays, many participants in financial markets invest globally. The Japanese cash market is the largest and most important market in Asia. With our MSCI Japan future we enable our European and US customers, in particular, to better hedge their Japanese equity exposure and offer at the same time new trading opportunities.”
The MSCI Japan index represents approximately 85 per cent of the market capitalization of Japanese stocks. It comprises nearly 350 of the largest companies listed on the main Japanese cash markets.
The new future will be denominated in US dollar, settled in cash and will have quarterly expiration dates. As underlying it uses the net total return version of the MSCI Japan, which is the standard in the OTC market (total return swaps) as well as with investment funds and exchange-traded funds.
To support order book trading, a market making scheme will be initiated to ensure on-screen liquidity. Trading hours will be from 8am until 10pm CET. In order to be in line with the Japanese market, settlement day will be the second instead of the third Friday, usually used for other Eurex index futures.