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Tuesday, July 1, 2008

The JSE has listed a mini FTSE/JSE Top 40 futures contract the beginning of June. This will allow retail clients to invest in a future or option on the future on the ALSI Top 40 Index. This contract will be known as the ALMI.
“The existing ALSI Top 40 futures contract is valued at approximately R300 000, which is out of reach to many retail investors because their rand exposure would be too high,” explains Allan Thomson, Head of Trading at the JSE. “Now, with the listing of the Mini ALSI Top 40 futures contract, the contract is 100th the size of the current ALSI Top 40 futures contract, and this means the investor can get the same exposure to the ALSI Top 40 but at just R3 000 or so per contract.”
According to Thomson, the development and subsequent listing of the Mini ALSI Top 40 contract came about due to increasing pressure from retail investors via their brokers to be able to obtain a future or option on the ALSI Top 40 without the large exposure. Indeed the demand was evident from day one when over R525 000 was traded with four hours of start up.
The Mini ALSI contract is in line with international trends such as the successful launch of the Mini S&P 500, the Mini Nasdaq 100 and the Mini FTSE 100.

Copyright © Insurance Times and Investments® Vol:21.6 1st July, 2008
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