We believe the strong performance we have seen in such a short timeframe is down to five specific factors:

The first, is the products’ composition - the A50 contract has broad exposure to China’s ‘real’ economy.

Second, the product has support from regulators in Hong Kong and China, as well as certification from the US-based Commodity Futures Trading Commission. Next there is high level of correlation between the contract and the CSI 300 Index - the definitive, broad-based benchmark for A-share markets. Finally, the MSCI China A 50 Connect Futures contract is part of a rich ecosystem here at HKEX, offering derivatives products as well as access to the A-share universe, all in a one-stop shop.

One year may seem like a long time in markets, but it’s a relatively short time in the life of a product. And we are excited about the future – we still have scope to grow this product and the broader risk management ecosystem.

Quant funds are one of the segments that we think there is much more potential: Quant funds rely on product data – and lots of it – to feed their strategies and we think that as the product matures, we have much more scope to grow product usage in this segment of the market.

Also, the product still had the opportunity to ‘cross the chasm’ into the retail market; and the growth on the supporting product side, such as with the ETFs launched in the past year – these are all part of driving the product in the future.

We also think that the fundamentals driving interest in the A-share space are strong and long-term in nature.

International investors are underinvested in Chinese assets compared with China’s weight in the global economy, owning only 5.3% of the A-share free-float in 2021, compared with 30% of the Japanese market.

Over the past year, we have made a series of market structure improvements to meet investors’ needs. And we have been pleased to see the positive impact of these.

Most recently and most notably, we launched Derivatives Holiday Trading in May 2022, allowing international investors to trade non-HKD denominated futures and options products on Hong Kong public holidays.

Further, there has been reforms to closing auctions, increases in daily quotas, the introduction of real-time DVP and Master SPSAs and we have seen a reduction in onshore trading suspensions, as well as improved CNH liquidity.

On top of these advances, the product ecosystem here in Hong Kong has continued to grow.

For instance, four onshore and three offshore ETFs tracking the contract were launched last year, and MSCI China A50 Connect Index Derivatives Warrants were listed here in Hong Kong in August 2022.

And more than existing as a solitary product, the MSCI China A50 Connect Futures contract is one part of the whole MSCI suite and ecosystem here in Hong Kong totaling 38 futures products and two options products.

As well as offering exposure to China, the products in this suite track underlying throughout Asia, underlining Hong Kong’s position as a risk management centre for the region more generally, as well as China.

That suite of products has performed well – with monthly ADV tripling in the past ten months, from 11,000 contracts in October 2021 to about 29,000 contracts in July 2022, with encouraging growth in the MSCI Taiwan futures contract, increasing from 6,000 contracts in October 2021 to 9,000 contracts in July 2022.

But there’s still more to do to improve both the MSCI China A50 Connect Futures product and the market structure side, such as extending trading hours and improving capital efficiencies for clients, but, given our track record of enhancement, I believe we will get there.

So while we are very pleased with the progress made over the past year with our MSCI China A50 Connect Futures product, we believe that the product and markets’ positive fundamentals, coupled with the market structure improvements made in the past year and the increasing depth and richness of the broader ecosystem, will mean that we are very well-positioned to continue to grow as Asia’s risk management centre in the future.