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ASX Chief Operating Officer, Colin Scully said, "We believe this to be the first futures contract over the listed property trust sector anywhere in the world. ASX Property Trust futures will give users the flexibility of an exchanged traded derivative instrument for hedging and exposure management purposes".
Traders and investors in ASX Property Trust futures receive 50% margin offsets with ASX Mini50 and Mini200 index futures, adding to the efficient and attractive suite of ASX equity futures being offered. XPJ meets the CFTC criteria for a broadly based index. Exchange traded options over the same index will also be listed on 1 August 2002.
ASX Property Trust futures contracts are $10 per index point and have a March, June, September and December expiry cycle. Salomon Smith Barney have been approved to make continuous markets.
Managing Director of Standard & Poor's Index Services, Robert Shakotko said, "We are pleased that the ASX has adopted the Property Trust sector index as the basis of two licensed products, firstly an exchange-traded fund and now a futures contract. By virtue of working together, Standard & Poor's and the ASX are providing investors world-class investment products that meet the needs of the Australian market".
The Australian listed property sector represents approximately 8% of the world's listed property assets. The Property Council of Australia estimates that around one third of prime commercial real estate in Australia is owned by listed property trusts. The S&P /ASX 200 Property Trust index is capitalised at approximately $45 billion and has an attractive liquidity profile. The index was developed by Standard & Poor's through the adaptation of their global sector methodology to suit the Australian market.
This sector alone represents more than 50% of the capitalisation of the Australian bond market and turnover on the ASX is in the order of $50 million per day. The XPJ index has 27 constituent trusts with the largest, Westfield Trust accounting for 16.5% of the index.
"ASX Futures can facilitate easy and prompt listing of derivative contracts over all S&P/ASX indices. The creation of this new futures contract demonstrates ASX's response to industry needs. The ASX Board and management are committed to ASX Futures for the long term", said Colin Scully.
Full details of the contract can be found at www.asx.com.au/propertyfutures
