Bohai Commodity Exchange launches online yuan trading platform in Hong Kong

Tianjin-based bourse, the only non-bank allowed to conduct cross-border yuan trades, takes key step in expanding globally

PUBLISHED : Tuesday, 17 December, 2013, 12:28pm
UPDATED : Tuesday, 17 December, 2013, 12:30pm

Bohai Commodity Exchange, the only mainland exchange allowed to do cross-border yuan trading, launched a platform in Hong Kong on Monday – its first step in expanding internationally.

Yan Dongsheng, board chairman of the exchange, told South China Morning Post that its online trading platform would allow Hong Kong and foreign investors who join the bourse to make yuan settlements.

They can trade on any of 70 commodities, ranging from petrol, iron ore and rubber to bird’s nest, agricultural products and Chinese medicines.

“We chose Hong Kong as our first location to expand outside mainland China because Hong Kong is the largest offshore yuan trading centre,” Yan said. “It has an active capital market and sound banking system.”

The exchange gained approval in April from the People’s Bank of China, becoming the first non-bank institution to conduct cross-border yuan trading.

Yan said the bourse was not a competitor of the London Metal Exchange which is now owned by Hong Kong Exchanges and Clearing. HKEx bought the world’s largest metal exchange to expand into commodities, while the LME also plans to introduce yuan commodities in Hong Kong next year.

“There will be no competition with LME as the Bohai Commodity Exchange provides spot trading while LME is trading futures products. We could provide different services for industrial players and investors,” Yan said.

Established in 2009, the Bohai Commodity Exchange is headquartered in Tianjin, an economic hotspot in the country’s north, and handles 20 billion yuan in trades daily.