German trading venue, Deutsche Börse has agreed on a strategic cooperation with the Shanghai Stock Exchange and China Financial Futures Exchange to develop and market financial instruments to international investors outside mainland China, according to a Deutsche Borse statement.
The venture is designed to foster the internationalization of the Chinese Renminbi (RMB). Collectively, the joint venture will be named ‘China Europe International Exchange’ targeting the commencement of market operations in Q4 2015. Initially, the product development will cover cash market products for the launch.
In terms of specifics, Shanghai Stock Exchange and Deutsche Börse will each own 40% of China Europe International Exchange with China Financial Futures Exchange owning the remaining 20% of the venture – the new company will be incorporated in Germany.
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According to Dr. Gui Minjie, Chairman of Shanghai Stock Exchange, in a recent statement on the joint venture, “In the context of China’s capital market liberalisation, the offshore trading platform set up by the three exchanges will further promote the two-way opening up of China’s capital market, enrich the product line of the offshore RMB market and accelerate the pace of Renminbi internationalisation. The joint venture is a major step forward in the cooperation between our three exchanges, and I believe it will also be rewarding and fruitful.”
“The establishment of the RMB asset trading platform in Frankfurt by Shanghai Stock Exchange, China Financial Futures Exchange and Deutsche Börse is a milestone for Chinese exchanges and capital market in general. It will help pave the way for further opening up of China’s capital market and contribute to RMB internationalisation,” noted Zhang Shenfeng, Chairman of China Financial Futures Exchange, in an accompanying statement.
“China has developed into an important player for the global economy. The joint venture is meant to support this role further by promoting the internationalisation of the RMB with capital market products. The joint venture is also a result of the excellent relationship amongst the three partners. We feel honoured to participate in this new venture,” added Andreas Preuss, Deputy CEO of Deutsche Börse AG.
Earlier this month, Deutsche Börse, including Xetra, Börse Frankfurt and Tradegate Exchange, reported order book turnover across all asset classes in April 2015, which highlighted a figure of just $153.0 billion (€137.1 billion).