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MSCI gauges move to HKEX

Published on
July 16, 2020
MSCI gauges move to HKEX
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On May 28th, 2020 Shares in the Singapore Exchanged suffered their biggest fall in 17 years when MSCI accounted that it would move its licensing for derivatives product on a host of gauges to HKEX next year.

To this effect HKEX will host trade in contracts which are tied to MSCI index’s and licensed from the New York based global index publisher MSCI. The move was seen as getting more access to mainland Chinese institutions and retail investors.

So nothing new on that the move is about competing for business but then on June 30th, 2020 the Hong Kong national security law was passed and this set about some retaliatory sanctions one such law passed in the US the Hong Kong Autonomy Act will sanction individuals that the state department determines are involved in the erosion of Hong Kong’s autonomy and punish banks that continue to serve them as clients. But Hong Kong's new national security law threatens to imprison people who “collude” with foreign powers, including passing sanctions like those just triggered by the U.S. The competing laws threaten to leave internationalbanks torn between two obligations: one to Washington and the other to Beijing.

Bad timing from MSCI and a risky move?

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