HSCEI autocallable hedging hitting forex market, say dealers

Dealers flock to Hong Kong dollar options and forwards markets amid depeg fears

China volatility has put pressure on the Hong Kong dollar peg to the US dollar

Attempts by issuers to rehedge structured products linked to a falling Chinese equity index have had a knock-on effect on Hong Kong dollar foreign exchange options and forwards, according to dealers.

Equity-linked autocallable products referencing the Hang Seng China Enterprise Index (HSCEI) and sold to Korean retail investors have been under pressure since the start of January, following a plunge that saw the index fall from more than 9,000 points to a low of 7,823.

With the investors paying in

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