What is the Nikkei 225 stock index futures?
Japan opened its securities market in the early 1980s, allowing foreign investors to invest in domestic stock markets. However, its stock index futures contract first appeared overseas. According to the Japanese securities trading law at the time, securities investors engaged in futures trading were prohibited. Therefore, the Japanese stock market at that time did not have the legal conditions for the introduction of stock index futures trading. Moreover, according to the then Securities Exchange Act, Japanese domestic funds were banned from investing in SIMEX's Nikkei 225 index. Only US and European institutional investors used SIMEX's Nikkei 225 stock index futures contract to invest in Japanese stocks hedging. Institutional investors in the country are clearly at a disadvantage. For this reason, on June 9, 1987, Japan launched the first stock index futures contract - 50 stock futures contracts, subject to the restriction of cash delivery at the time of the securities trading law, 50 stock futures contracts to take the spot delivery The way is to use the basket of stocks represented by the stock index as the delivery target.
The Singapore International Financial Exchange (SIMEX) was the first to launch, and in 1986, Japan's Nikkei 225 Index futures trading was launched and succeeded. In Japan, the Nikkei Stock Exchange futures trading was launched by the Stock Exchange (OSE) two years later. In 1990, the Chicago Mercantile Exchange (CME) also launched the Nikkei 225 Index futures trading, forming three common trading Nikkei 225 index. In the competition, Singapore has always maintained a leading position as it has already formed certain advantages. Until the beginning of 1995, when the British Bahrain Bank futures trader Nick Lissen caused the bankruptcy of the Bahrain Bank due to the illegal operation in the speculative Nikkei 225 index, the market had a confidence crisis on SIMEX’s Nikkei 225 index, and the funds began again. After returning to the Japanese market, OSE took the opportunity to regain control. In a sense, the occurrence of the Bahrain incident is also the result of competition between OSE and the SIMEX market. In order to compete for the market share of OSE, SIMEX will not hesitate to relax the monitoring of the market. In the case that the position of Bahrain Bank is obviously high, not doing timely processing directly leads to the huge loss of the Bank of Bahrain. If SIMEX takes an effective approach to market competition and makes full use of its advantages, it is entirely possible for Singapore to dominate the Nikkei 225 Index futures market. But in general, Japan has long been in an awkward position in promoting Nikkei 225 stock index futures trading. From the 2005 data, in the global Nikkei 225 index futures market, Japan only has a 55.05% share. In 2005, Singapore's Nikkei 225 index futures prices seriously affected the price of the Japanese Nikkei 225 index, and Singapore's Nikkei 225 had a large degree of pricing power.
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