Japan's Mothers index futures off to slow start

Cyberdyne

19/07/2016 10:55

* Mothers Index futures make Japan market debut 
    * Bourse hopes futures will lure new investors to startup 
index 
 
    By Tomo Uetake 
    TOKYO, July 19 (Reuters) - Futures contracts of Japan's 
benchmark start-up stock index attracted meagre volumes on their 
debut on Tuesday as investors remained cautious about the new 
derivative product. 
    Trading in Mothers Index futures  JMIc1  was 2.6 billion yen 
 ($24.5 million), a small fraction of the 114 billion yen 
turnover in its underlying cash counterparts, which are mostly 
driven by speculative Japanese retail traders. 
    In contrast, trading volumes of the Nikkei and Topix futures 
contracts were 60 percent of their underlying components on 
Monday. 
    The Mothers Index  .MTHR  - an acronym for Market Of The 
High-growth and Emerging Stocks - comprises biotech ventures and 
other small-caps, and is known to be much more volatile than the 
main board. It attracts largely speculative investment, much of 
it from domestic retail investors. 
    The new futures contract - which is managed by the Osaka 
Exchange - enables investors to trade the index at a preset 
future date. 
    One of Osaka Exchange's main marketing points for the index 
futures was the ability to take short positions in Japan's 3.5 
trillion yen Tokyo Stock Exchange Mothers market, which has 
historically been limited by thin liquidity. 
    Hiromi Yamaji, the president of the Osaka Exchange, Japan's 
main financial derivatives trading centre, said last month 
foreign players have shown strong interest in the Mothers 
futures. 
    However, institutional investors are cautious. 
    "Unless you have a portfolio that is similar to the Mothers 
Index, you could end up taking more risks by trading its 
futures, rather than hedging," said Yasuo Sakuma, portfolio 
manager at Bayview Asset Management. 
    Despite the small-cap profile, the index includes three 
relatively large stocks that account for 40 percent of the 
index: biotech venture Sosei Group  4565.T , robotics firm 
Cyberdine  7779.T  and social networking and mobile game 
developer Mixi  2121.T . 
 
($1 = 106.1000 yen) 
 
 (Additional reporting by Hideyuki Sano; Editing by Sam Holmes) 
 ((tomo.uetake@thomsonreuters.com; +81-3-6441-1645; Reuters 
Messaging: tomo.uetake.thomsonreuters.com@reuters.net)) 
 
Keywords: JAPAN STOCKS/STARTUPS