Derivatives market development (THỊ TRƯỜNG PHÁI SINH SLIDE)

Derivatives Market Development Derivatives Trading - Selected Central & Eastern European Experience - Hannes A Takacs Managing Partner, CAPMEX – The Capital Market Experts CEESEG – CEE Stock Exchange Group  Four Countries - One Exchange Group Derivatives Markets within CEESEG © CAPMEX CEESEG – Derivative Markets  Derivative Markets of CEE Stock Exchange Group  Vienna Stock Exchange – Wiener Borse • Products: Futures/Options on indices and stocks  CEGH Gas Exchange of Wiener Borse • Product: Gas Futures  Budapest Stock Exchange • Products: Futures/Options contracts on stocks, indices, FX, interest rate,grain  Prague Stock Exchange • Products: Futures on index and stocks  PXE – Power Exchange Central Europe • Products: Futures on electricity (1 MWh) – Czech Republic, Slovakia, Hungary © CAPMEX Wiener Borse - Vienna Stock Exchange  Key Facts Derivatives Market of Wiener Borse AG  Austrian Futures & Options Exchange founded 1991 • • • • • • Feasibility study conducted before decision making Exchange implemened within year 1st trading system: OM Click Austrian Traded Index-ATX developed as underlying for Futures/Options Integrated clearing house Market education started months before start of exchange  OTOB merged with Vienna Stock Exchange in 1997 • Derivatives market became market segment of Vienna Stock Exchange • 1999 full privatization of stock exchange • 2005 CCP Austria started operations – clearing/settlement for cash & derivatives market • 2010 introduction of EUREX® as derivatives market trading system • 57 foreign remote members connected to Vienna Stock Exchange © CAPMEX Derivatives market.at  Quality Features  Fully electronic trading platform (Eurex®)  Uniform contract specifications  Daily margin calculation  Standardized combinations and for longer maturities  Clearing in line with international standards (CCP.A)  All derivatives for CEE markets are available in a single trading system, with one currency and one clearing house  Simplified risk management of positions by including the exchange rates in the index calculation for CEE products © CAPMEX Derivatives Market Products  Austrian products     CEE Products ATX futures & options ATX - futures & options Stock options + single stock futures © CAPMEX        CTX in EUR futures & options HTX in EUR futures & options PTX in EUR futures & options CECE in EUR futures NTX in EUR futures & options RTX in USD futures & options RDX in EUR/USD futures Derivatives Market Products in Vietnam © CAPMEX Market Model – Trading Phases 08:15-08:55 08:55-09:03 09:03-17:40 17:40-18:00  Pre-trading  Market participants enter/change orders+quotes to prepare for trading • No view given on the order book  Main trading phase  Opening : Orderbook open, price determination phase  Continuous trading  Post-trading  Enter/change orders+quotes for next trading day  Trades concluded are processed © CAPMEX Protection Mechanisms of Market Model  Reasonability checks  Protective measure to prevent erroneous entries • Limit as well as order volume is checked • If limit confirmed, order is placed in central order book • If order volume is invalid an error message is displayed  Market order matching range  Purpose: prevent market orders emptying the bid/ask side of order book and drive prices in one direction • Used for trading in futures • Corridor is monthly defined by WBAG for each product (market order matching range)  Volatility interruption  Volatility interruption in futures is triggered whenever the last price determined • is within a predefined period of time (time window) and also • lies outside of the volatility corridor around the reference price © CAPMEX Key Success Factors Key Success Factors for Implementing a Derivatives Market in Vietnam based on International Experiences © CAPMEX Main Key Success Factors  Right timing    Feasibility study on market potential Full committment of major market participants Legal/regulatory framework has to be in place  Well-planned implementation process     Market Readiness – Exchange Readiness - Member Readiness Market Model according to market needs and development stage Internationally accepted trading and clearing system + CCP Implementation will take app months to year  Products    VIETX – Vietnam Traded Index covering the to 10 most liquid stocks Products based on market demands Contract sizes have to fit target groups  Market education   Timely education of the market is essential Training must start at least months before trading start © CAPMEX Potential Products  Index Futures & Options  Futures and Options on new VIETX 10 and VIETX Top  Single Stock Futures  Futures on the Top Stocks  Stock Options  Options on prime market stocks  Pre-requisites     Underlyings are continuously traded Contract sizes and series according to market needs Trading is anonymously and CCP is in place Obligatory Market Maker System for all underlyings + derivatives © CAPMEX Implementation Process  Three cornerstones for successfully implementing a Derivatives Market in Vietnam Market Readiness - Feasibility study - Legal environment - Market environment - Clearing House/CCP - SEC - Market know-how Market Readiness Exchange Readiness - License - Rules & regulations - Members/Contracts - IT systems - Products - Staffing Exchange Readiness © CAPMEX Member Readiness - License - IT systems - Risk management - Personnel - Know-how - Clients Member Readiness ANNEX: Indices as Underlyings  Indices developed by Vienna Stock Exchange         Vienna Stock Exchange established itself as „Index House“ Developed/calculated indices serve as underlyings for derivative products Developed/calculated indices serve as underlyings for structured products Indices are also developed/calculated on behalf of other stock exchanges Licensing of indices to investment banks represents additional income source As February 2011 app 52 indices were developed, calulated and/or managed Vienna Stock Exchange in cooperation with CAPMEX advices on index development, management and caluclation Overview of selected indices   A short overview of selected indices is given on the following slides More information can be obtained from Wiener Borse´s Index website http://en.indices.cc/ © CAPMEX Austrian Indices ATX Index Family ATX (1991 - EUR) Austrian Traded Index The ATX (Austrian Traded Index) contains the most actively traded and highly capitalized stocks of the prime market segment and has been designed as underlying reference for futures and options ATX Prime (2002 - EUR) The ATX Prime is designed as an allshare index and consists of all securities traded in the prime market segment ATX five (2004 - EUR) The ATX five consists of the five shares with the highest weighting in the ATX WBI (1967 - EUR) The WBI (Wiener Börse Index) contains all shares listed on the Official Market and the Second Regulated Market The index is calculated once a day after the closing of the trading session Wiener Bưrse Index © CAPMEX IATX (1996 - EUR) Immobilien ATX The IATX comprises the real estate stocks of the prime market International Indices Central- and Eastern Europe Country Indices Regional Indices CECE Family CIS Sector Indices CECE BNK (2006 - EUR) Country Indices Sector Indices RTX (1997 – EUR, USD, RUB) RTX MET (2009 – EUR, USD, RUB) Russian Traded Index RTX Mining & Metals Index CTX (1996 - EUR, USD,CZK) CECE Banking Index Czech Traded Index CECE OIL (2006 - EUR) RTX MID (2008– EUR, USD, RUB) RTX NRG (2009– EUR, USD, RUB) CECE Oil & Gas Index RTX Mid Cap Index RTX Energy Index CECE TEL (2006 - EUR) RDX (1999 - EUR, USD) RTX OIL (2009– EUR, USD, RUB) PTX (1996 - EUR, USD, PLN) CECE Telecom Index Russian Depositary Index RTX Oil & Gas Index Polish Traded Index CECE HCA (2006 - EUR) RDXxt (2007 - EUR, USD) RTX TEL (2009– EUR, USD, RUB) CECE Health Care Index RDX Extended Index RTX Telecom Index HTX (1996 - EUR, USD, HUF) CECE (1996 - EUR, USD) Hungarian Traded Index CECE Composite Index ROTX (2005 - EUR, USD, RON) SETX (2006 - EUR, USD) CECE INF (2007 - EUR) UTX (2007 - EUR, USD, UAH) Romanian Traded Index South-East Europe Traded Index CECE Infrastructure Index Ukrainian Traded Index CROX (2007 - EUR, USD, HRK) Croatian Traded Index SRX (2007 - EUR, USD, RSD) Serbian Traded Index BTX (2008 - EUR, USD, BGN) Bulgarian Traded Index CERX (2007 - EUR) CECExt (2006 - EUR, USD) CEE Real Estate Index CECE Extended Index KTX (2007 - EUR, USD) Kazakh Traded Index Asia CECE MID (2007 - EUR, USD) Länder Indizes CECE Mid Cap Index CNX (2005 - EUR, USD, RMB) NTX (2005 - EUR) China Traded Index New Europe Blue Chip Index CECE (Central European Clearing House & Exchanges) © CAPMEX Theme- & Style-Indices Theme- & Style Indices SATX (2007 - EUR) ATXTR (2008 - EUR, USD) VÖNIX (2008 - EUR) ATXFND (2009 - EUR) Short ATX ATX Total Return Austrian Sustainability Index ATX Fundamental SCECE (2007 - EUR) CECETR (2008 - EUR, USD) CEERIUS (2009 - EUR) Short CECE CECE Total Return CEE Responsible Inv Universe RDXTR (2008 - EUR, USD) RDX Total Return © CAPMEX Example: China Traded Index - CNX  CNX – China Traded Index  Index was launched on 5th December 2005  CNX is a capitalization-weighted price index which currently consists of 30 Chinese “A Shares” traded at the Shanghai Stock Exchange (SSE) Calculated in three currencies (EUR, USD, Renminbi Yuan), the CNX is designed as a tradable index  Main Features of the CNX  Dividend payments are not considered  Representation factors can take values between 0.01 and 1.00 and are used to avoid that an index member exceeds a maximum weighting cap of 20%  Calculation each day the SSE is open for trading (also in case of an exchange holiday in Austria)  The index is calculated once a day after the closing of the trading session on Shanghai Stock Exchange  Changes to the index composition on a semi-annual basis  Quarterly review of the calculation parameters  Eligible for inclusion: only ordinary “A Shares” of joint-stock companies domiciled in China © CAPMEX Disclaimer  Disclaimer CAPMEX Unternehmensberatung GmbH – The Capital Market Experts – believes that the information provided in this presentation/document is accurate on publication date The presentation is subject to change without notice CAPMEX will not accept responsibility for damage, direct or indirect, caused by errors in this presentation CAPMEX prepared the presentation for the derivatives market conference organized by LUXDEVELOPMENT in the frame of funded capital market development project VIE/026 and by the State Securities Commission of Vietnam In Hanoi on 14th April 2011 While CAPMEX, its employees, consultants and advisers have used their reasonable endeavours to ensure that the information contained in this presentation is accurate at the date of the preparation, no responsibility is taken by CAPMEX or any of its employees, consultants and advisers for any error, omission or misdescription contained herein or for any changes in particulars or circumstances relating to the information contained in the presentation The presentation is submitted for information purposes only © CAPMEX ... for cash & derivatives market • 2010 introduction of EUREXđ as derivatives market trading system ã 57 foreign remote members connected to Vienna Stock Exchange © CAPMEX Derivatives market. at ... + derivatives © CAPMEX Implementation Process  Three cornerstones for successfully implementing a Derivatives Market in Vietnam Market Readiness - Feasibility study - Legal environment - Market. .. presentation CAPMEX prepared the presentation for the derivatives market conference organized by LUXDEVELOPMENT in the frame of funded capital market development project VIE/026 and by the State Securities