Lai See

PUBLISHED : Saturday, 06 November, 2010, 12:00am
UPDATED : Saturday, 06 November, 2010, 12:00am

Is there a conflict at the new HKMEx?

We understand that the Hong Kong Mercantile Exchange (HKMEx) is poised to make an announcement, possibly next week, about when it will open for business. We are told it will be this year but this exchange, which was first mooted in 2008, has been a long time coming.

When the idea of the exchange was first announced, the stated aim was to provide hedging instruments for commodity trading in consumption in Asia and particularly China. Yet the first proposed contract to meet this demand - fuel oil - was subsequently dropped in favour of gold. Once started, the plan is to roll out more products.

The plan is to build a commodities exchange similar in stature to the London Metal Exchange and the markets in New York and Chicago - to be aligned with what is perceived as the changing balance of economic power from West to East.

It will be of some interest to see what follows gold. With the recent acquisition by Oleg Deripaska's En+ of a 10-per-cent stake in the exchange, there will presumably be some interest from that quarter in an aluminium contract. En+ owns 47 per cent of Rusal, the world's largest aluminium producer.

Deripaska has often voiced his interest in establishing a new benchmark price for aluminium, presumably one that he feels he can influence more. The current benchmark price is set by the LME.

Deripaska's involvement in the new exchange also raises the interesting question of his relationship with Barry Cheung, the chairman of HKMEx. Cheung (pictured) was appointed an independent non-executive director of Rusal shortly before its IPO earlier this year.

However, with En+ taking a significant stake in the exchange, some argue that this compromises his independence and creates a conflict of interest. Some say he should withdraw from Rusal, others that he could continue as a non-executive director. We understand that Cheung has looked into this and believes there is no conflict of interest.

Fruit of the vine

To Yung Kee, where Charles Wines was hosting a wine dinner - one of the many fringe events surrounding the Hong Kong International Wines and Spirits Fair. There we met Petrus Desbois, who has presided over the Chateau St Georges estate in Bordeaux since 1974.

He is the third member of the family to preside over the estate since it was bought by his grandfather as a summer home in 1891. The chateau's appellation - Saint Georges-Saint Emillion - is the smallest appellation in Bordeaux and it produces some 300,000 bottles a year.

We were treated to three wines including the 2005 vintage, which was acclaimed the best vintage in Bordeaux and the best since 1990. But drinking wine - his wine - at the arm of the master can be somewhat unnerving. Eventually he turned to me and said the words we had been dreading: 'So what do you think?'

Hints of tobacco, strawberry notes, flash through the mind. We sniffed and twirled the glass. 'Excellent,' we said. He laughed. Such are the rigours of writing Lai See.

Wines & spirts

The Hong Kong Trade Development Council might be patting itself on the back for the success of the International Wines & Spirits Fair this week. However, one aspect of the proceedings they may not be so proud of is their sign-writing ability.

Wandering through Lan Kwai Fong, a reader noticed an HKTDC sign on a lamppost for all to see advertising the Hong Kong International Wines & Spirts Fair. Maybe someone has been at the spirts, as they say at the HKTDC, a little early.

Bloomberg's lamp

How lucky is Michael Bloomberg? He went to Shenzhen, where he called on the mayor, and visited Trony Solar Holdings, where he was presented with a table lamp. But this was no ordinary table lamp - it is powered by a thin-film solar panel, and can also be used to power a cellphone charger. Thanking his hosts, he said, 'Well, we've got a lot of sun in the US and we get blackouts,' A lamp for all seasons.

Farmer Jim?

Jim Rogers, chairman of Rogers Holdings, doesn't pull his punches. Commenting on Federal Reserve Chairman Ben Bernanke's decision to pump a further US$600 billion into the US economy, Rogers said in a lecture at Oxford University's Balliol College yesterday, 'Dr Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance.

'All he understands is printing money.' He told students to scrap career plans for Wall Street or the City, London's financial district, and to study agriculture and mining instead. But it will come as no surprise to learn that Rogers Holdings is in the finance business rather than mining or agriculture.