With China continuing to open up its capital market, the international products offered by the Shanghai Futures Exchange have been gaining overseas attention.

Tiger Shi, CEO of Bands Financial, said that he noted a marked diversification in the types of overseas investors and a significant surge in trading volume. Through overseas intermediaries and specialized brokerage channels, participants account for 20 percent of the total involvement in the Shanghai International Energy Exchange, a subsidiary of the Shanghai Futures Exchange.

HGNH International Financial saw the number of its overseas clients trading international products on the Shanghai Futures Exchange almost double year on year in 2024, while their trading volume increased almost threefold year on year, said Jiang Linqiang, general manager of the company.

Among overseas clients, Jiang said that there is not only a growing number of industrial investors with hedging needs, but also a notable rise in participation from institutional investors such as large commodity trading firms and proprietary traders in the international products of the Shanghai futures market.

A total of 24 domestic-specific futures products in China's futures market are now available to overseas traders, and qualified foreign institutional investors and RMB Qualified Foreign Institutional Investors are allowed to trade in 46 domestic futures and options products.

By the end of 2024, the number of active overseas clients increased by 17 percent year on year, while their positions grew by 28 percent year on year, according to the latest data from the China Futures Market Monitoring Center.

Industry insiders suggest that international clients are attracted to China's futures market due to their focus on the Chinese market and the market's liquidity. The international products in China's futures market offer clients diverse investment options and risk management tools.

The exchange has also drawn interest from overseas investors due to its design of international contracts, convenient trading hours, and settlement methods.

The Shanghai Futures Exchange will experiment with rolling out more international products to better meet risk management demand from global companies, said the exchange's deputy general manager Zhang Ming.

Source: yicai.com