Hong Kong has announced plans to launch a commodities exchange in an attempt to capatilise on China’s booming raw materials market.
The Hong Kong Mercantile Exchange (HKMEx) is scheduled for launch in the first quarter of 2009, and plans to trade US dollar oil contracts before expanding into other commodities. Large investment banks are expected to support and become members of the project.
“There is a huge opportunity for Hong Kong to develop a commodities futures market that can cater to the mainland and we are delighted to see the creation of (a commodities exchange) to accommodate these needs,” said Hong Kong financial secretary John Tsang in a statement.
In addition, Nasdaq OMX has been selected a technology provider for HKMEx and is to develop a specifically tailored trading system for the commodities marketplace. LCH Clearnet has been selected to provide clearing services for the platform, subject to regulatory approval. It was also announced that technology firm Patsystems will provide front-end interfaces and risk management solutions for the exchange.
“In order to create and handle high liquidity and trading volumes on our exchange, we need to operate on a secure and scalable high-end platform,” added Barry Cheung, chairman of HKMEx, in a statement. “Our selection of Nasdaq OMX was based on their proven technology as well as their long and successful experience in both the commodity and Asia-Pacific markets.”