Barclays' exit 'won't hit floor trading at LME'

PUBLISHED : Saturday, 24 November, 2012, 12:00am
UPDATED : Saturday, 24 November, 2012, 3:59am


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Barclays' decision to quit floor trading at the London Metal Exchange (LME) only reflects the state of the bank and is unrelated to the bourse's acquisition by Hong Kong Exchanges and Clearing, according to HKEx chairman Chow Chung-kong.

Chow said the long-standing open outcry system of floor trading would continue because it had proved to be effective and authoritative.

The British bank decided on Thursday to downgrade its LME membership to Category 2 to cut costs.

Category 2 membership allows only electronic and telephone trading while Category 1 allows participation in open outcry trading on the floor, which grants greater visibility and status.

"The acquisition of the LME has entered the final stage and I hope it can be finished by the end of the year," Chow said yesterday.

HKEx chief executive Charles Li Xiaojia said on Thursday that regulatory approval for the LME acquisition was expected to be finalised by early next month.

Chow said the LME, the world's biggest metals bourse, will launch new metal futures products in Hong Kong to strengthen the city's status as a global financial hub.

Meanwhile, more than HK$30 billion is expected to be raised this month through initial public offerings in Hong Kong. PICC, China's largest non-life insurer by premiums, could become the top company listed this year in terms of deal size.

Hong Kong's IPO market has been on ice this year and only started warming up in the last quarter. Chow said the city had a good investment environment and HKEx hoped more enterprises would be interested in going public here to raise capital.

"But the number of companies that will list and the amount of funds they will manage to raise will depend on the prevailing economic conditions as well as investor sentiment," Chow said.