The planned stock index futures (SIF) will benefit four types of shares, according to the semimonthly business journal Chinese Entrepreneurs.

SIF, which will allow domestic investors to sell short for the first time, will benefit the brokerage shares, blue chips, shares of companies linked to index futures trading, and close-end funds, according to the report.

Brokerage firms are considered the most obvious beneficiary by the magazine. Currently business performance of brokers is largely decided by the stock market since their commissions go up in a bull market.

With stock index futures trading, investors will be able to go long in a bull market and sell short in a bear market, allowing brokers to make money no matter the market is bullish or not. The first brokerage firms that are allowed for the derivatives trading include Haitong Securities, Everbright Securities, CITIC Securities, China Merchants Securities.

Blue chips are another category to benefit, such as China Merchants Bank, China Railway Construction, PetroChina, China Petroleum & Chemical Corporation and China Shenhua Energy.

For companies with links to the new trading, there are two types: listed companies that control certain futures brokerages, like Shanghai New Huang Pu Real Estate; or listed futures brokerage firms such as China Cifco Investment.

Investors will also be able to profit from price difference in close-end funds and stock index futures, by purchasing the funds at high discount and at the same time short sell stock index futures for arbitrage.

(China Daily February 22, 2010)