"The launch of index futures will fundamentally change such phenomenon by easing the fluctuation and let investors focus on blue chips," Yong said.

The market would change "structurally", as more capital would flow to heavyweights or blue chips, said Hu Yuyue, professor with the Beijing Technology and Business University.

History has already proven that in both the United States and Japan, market heavyweights had better performances after the index futures launched in the two markets, a report from Shenyin and Wanguo Securities indicated.

"Investors, especially institutional ones, would feel assured to invest in blue chips with such a risk reducer," Yong added.

According to Zhu Yuchen, general manager of CFFEX, institutional investors are the major target traders of the index futures, as they have already held more than 50 percent of the stocks listed in China's A-share market.

Currently, institutional investors are largely staying on the sidelines to start with as they await specific rules unveiled, although the futures meant more investment options in the capital market with less risk.

Of total 9,137 accounts opened to trade futures on the Hushen 300 as of April 15, 8,944 were made up of individuals ones, data from the CFFEX showed.

Yong said he believed that when the notional trading value of index futures exceeds 50 percent of turnovers at the cash market, the index futures would start to play its function.

"The index futures trading would gradually attract more institutional investors, which would help China's A-share market make a shift and turn to a market led by the blue chips," said Qiu Yanying, chief analyst with Shanghai-based TX Investment Consulting Company.

(Xinhua News Agency April 18, 2010)