Hong Kong Exchanges and Clearing Ltd is the holding company for the city’s stock exchange, futures exchange and clearing company. Its market capitalisation made it the world’s biggest listed bourse as of the end of 2012. In December 2012, the HKEx clinched the US$2.2 billion takeover of the London Metal Exchange, the world's biggest marketplace for industrial metals.
Commodity markets pin hopes on Hong Kong ties
Mainland commodity exchanges are looking to co-operate with Hong Kong Exchanges and Clearing in developing the trading of new commodities and cross-listing their products.
They hope to gain a greater share of the global market through this after HKEx announced plans to develop the city into a commodities trading hub.
Calling the city's exchange a "partner" rather than a "competitor", Zhengzhou Commodity Exchange president Zhang Fan said he wanted to develop trading of new commodities with HKEx and list the new products "wherever suitable", so that mainland bourses could share in the pie as transaction volumes increased.
Echoing Zhang's view, Liu Xingqiang, the president and chairman of the Dalian Commodity Exchange, said: "We have been proactively seeking to cross-list products [with our partners] and considering whether the time is ripe to fully open up to international investors to trade futures on the mainland.
"If China has many commodities trading platforms that are connected to international markets, hedging costs for Chinese companies would be lowered drastically, and efficiency for such risk-reducing activities would also increase."
Speaking at a forum in Hong Kong yesterday, Liu and Zhang said HKEx would play a key role in opening up the mainland's commodities trading market.
HKEx could draw on its global client base and deep yuan pool to help diversify the investor base in the mainland's commodities market, where 95 per cent of investors were still retail, Liu said.
The Zhengzhou exchange, which mainly trades agricultural commodities such as edible oil and cotton, planned to list new commodities such as energy, chemicals and construction materials, Zhang said.