Hong Kong Ex to launch metal trading platform
April 3, 2014 Category Automotive Metals & Minerals, Metals
Hong Kong Exchanges and Clearing (HKEx) plans to introduce the Hong Kong version of the London Metal Exchange (LME) platform this year to launch the local commodities market. “HKEx is expected to face a lot of challenges in promoting this new market as many local brokers and investors do not have sufficient knowledge about metal trading. The bourse will need to provide a lot of education and promotion in the following months before the launch,” warned Christopher Cheung, Legislator for the financial services sector. The bourse has not yet announced what products will be traded on the platform, but HKEx Chief Executive Charles Li said they would be settled by cash and all local futures brokers could trade on it with no need to apply for membership of the LME. It will also negotiate with exchanges on the mainland for possible cross-selling of each other’s products. HKEx reported a disappointing 11% profit rise last year, partly as a result of the costs related to the LME acquisition. Jeffrey Chan, Chairman of the Hong Kong Securities Association, said it was a wise move that HKEx now planned to allow all 180 futures brokers in Hong Kong to trade on the LME instead of requiring them to apply for membership. However, Hong Kong investors are not very enthusiastic about commodities trading. HKEx already has gold futures trading but turnover is nil.
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