In terms of investor structure, the biggest difference between the CSI 300 Index and FTSE New China A50 Index lies in the different investor structure. The main participants in the Singapore market are overseas institutional investors, including QFIIs, which invests in China's domestic market. The market will be composed of institutional investors and individual investors. Initially, it is expected that more individual investors will participate. In addition, overseas institutional investors generally have mature investment concepts and operational experience, while domestic investors in China generally have no relevant investment experience, so China's domestic market will be affected by the Singaporean market. However, because the RMB capital account is not convertible, although overseas institutions have mature investment experience and huge financial strength, they are unable to invest heavily in China's domestic stock market and have enough cash. Therefore, the FTSE New China A50 Index can only follow the A-share market, and it is difficult to lengthen the index first, or shorten the index before pressing the index. The above pricing method is not easy to realize. In other words, the Singapore market has no substantial guiding mechanism for China's domestic market. Of course, with the increase of QFII quota and the gradual liberalization of RMB capital account, this situation may change.
From the perspective of pricing efficiency, the arbitrage mechanism of the market must be more effective. At present, China's domestic margin financing and securities lending business is about to start, but it is actually subject to many constraints. The growth of margin trading needs a development process, mainly short-term financing. Due to short selling, stock index futures are undervalued, such as Singapore A50 and Shanghai and Shenzhen 300. If the institution holds a large number of stocks, even if the market lacks a short-selling mechanism, the institution can still buy the cyclical index and sell the stocks for arbitrage, so that the cyclical index will not be seriously underestimated. From this point of view, the higher the spot market pricing efficiency, the more advantages China's domestic market will have.
From the above analysis, it can be seen that the main investors of Xinhua FTSE A50 index are isolated in the spot market, and this product will not have a significant impact on China domestic market and the upcoming stock index futures in the short term. The average turnover of A50 futures on the first Sunday was less than 200 lots. As of Thursday, September 7th, 2006, * * * owned 133 gears, and the total contract amount was about USD 6.82 million. Although the trading volume is small, investors should pay attention to the development of A50 futures and its potential impact on China's domestic capital market.