China launched the country’s first ship futures product on Friday. The Containerized Freight Index (Europe Service) futures contracts have been listed for trading on the Shanghai International Energy Exchange (INE).
The futures reflect the freight rates for containers shipped from Shanghai to European ports, with the aim of helping companies hedge against the risk of volatility in container freight prices.
The move aims to “contribute to China’s initiative to build a strong shipping industry, support Shanghai’s development into an international financial and shipping hub, help improve China’s shipping finance services, and further promote the function of futures markets in serving the real economy.” ‘ the INE said in a draft published last month.
Compiled by the Shanghai Shipping Exchange (SSE), the Shanghai Containerized Freight Index based on settled rates (Europe Service), the futures is the world’s first ship futures product based on China’s index, and also the first index type and cash-settled futures Contract in the service sector in China.
The launch and operation of this type of futures means a lot for the innovative development of China’s futures market, the country’s opening-up efforts and improving the quality of market operations, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission Friday.
Dier Luo, distributor of the foreign institutions department at Bank of China International Futures, told CGTN that the container freight index futures can provide industry investors with a financial tool to manage operational risks.
If the containerized freight index futures are recognized by both local and foreign investors, the price can be widely used in real trading, and it will have a huge impact on China’s overall international trade landscape and boost RMB internationalization, Luo added added.
Source: CGTN
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