HKEx Announces Plans for Industrial User Base for China Metals Hub
- The bourse’s plan to develop the industrial user base is welcomed after continued attempts to break into China.
Hong Kong Exchanges and Clearing is planning to develop an industrial user base to back its metals trading hub in China as part of a drive to expand its commodity business in the world's second largest economy.
A new free trade zone near Hong Kong, known as Qianhai, is set to host the platform for trading metals before extending into other commodities, pending regulatory approval, according to HKEx spokesman Scott Sapp.
Sapp commented: "Our goal is to leverage our experience in launching new initiatives with the mainland and the LME's (London Metal Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term) successful model to 'physicalize' the mainland's commodities market.”
HKEx bought the LME for $2.2 billion at the height of the commodities boom in 2012, and a mainland presence would be welcomed after a year-long struggle by the London bourse to break into China. HKEx Chief Executive Charles Li has previously said that plans by HKEx to create mainland, physically deliverable spot commodity markets are a way of getting the LME's warehousing expertise into China.
By the end of 2015, annual spot commodities trading volume had reached $4.5 trillion on more than 350 independent exchanges in China, according to data from Euromonitor. Trading volume grew 35 percent annually from 2011 to 2015.
However, regional commodities exchanges have no central regulator and many investors have walked away with their fingers burnt, leaving an opportunity for HKEx to leverage its LME brand.
Hong Kong Exchanges and Clearing is planning to develop an industrial user base to back its metals trading hub in China as part of a drive to expand its commodity business in the world's second largest economy.
A new free trade zone near Hong Kong, known as Qianhai, is set to host the platform for trading metals before extending into other commodities, pending regulatory approval, according to HKEx spokesman Scott Sapp.
Sapp commented: "Our goal is to leverage our experience in launching new initiatives with the mainland and the LME's (London Metal Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term) successful model to 'physicalize' the mainland's commodities market.”
HKEx bought the LME for $2.2 billion at the height of the commodities boom in 2012, and a mainland presence would be welcomed after a year-long struggle by the London bourse to break into China. HKEx Chief Executive Charles Li has previously said that plans by HKEx to create mainland, physically deliverable spot commodity markets are a way of getting the LME's warehousing expertise into China.
By the end of 2015, annual spot commodities trading volume had reached $4.5 trillion on more than 350 independent exchanges in China, according to data from Euromonitor. Trading volume grew 35 percent annually from 2011 to 2015.
However, regional commodities exchanges have no central regulator and many investors have walked away with their fingers burnt, leaving an opportunity for HKEx to leverage its LME brand.