As of the close of 1 March 2002, the MSCI Japan IndexSM contained 321 securities with a total market capitalization of JPY 174,569,316 mil. or US$ 1,310,482 mil. MSCI Japan represents 8.41% of the MSCI World IndexSM.
The SGX MSCI Japan Index Futures Contract aims to meet the strong demand for a hedging and investing instrument that is based on a globally recognized, capitalization-weighted index which reflects the sectoral diversity of the Japanese equity markets. The construction of the MSCI Japan index is fully consistent with the global range of MSCI indices, such as the MSCI World, MSCI ACWISM and MSCI EAFESM indices - which are all leading benchmarks for funds across the world. Demand is expected from fund managers, securities houses, hedge funds and other financial institutions. The SGX MSCI Japan Index Futures Contract is also expected to benefit from new arbitraging opportunities with the price-weighted Nikkei 225 index and other Japanese equity indices.
Trading hours for the SGX MSCI Japan Index Futures Contract will be from 7.55 am to 10.15 am and from 11.15 am to 2.25 pm (Singapore Time). After-hours trading will be from 3.30 pm to 7:00 pm (Singapore Time). The contract size will be JPY 5,000 multiplied by the MSCI Japan Index level. Based on the closing index value of 649.37 on 1 March 2002, the value of each futures contract would be JPY 3,246,850, which is about three-fifths the size of the SGX Nikkei 225 Futures Contract. Five quarterly contract months, in the March, June, September and December cycle, will be listed for trading.
Mr Thomas Kloet, CEO of SGX, said, "We are pleased to extend our suite of equity index products and our relationship with MSCI by today's agreement. The launch of MSCI Japan Index Futures on SGX-ETS will provide global market participants increased access to new trading, arbitraging and risk management opportunities based on a well established and widely followed capitalization-weighted benchmark of the Japan market."
Mr Henry Fernandez, President and CEO of MSCI, said, "We are delighted to have licensed the MSCI Japan IndexSM to SGX following the large demand from global market participants. MSCI Japan is a widely monitored index around the world and accounts for a significant part of our broader MSCI benchmarks such as MSCI WorldSM and MSCI EAFESM. The SGX futures contract will provide an important new tool for investors to manage their MSCI benchmarked portfolios".
