Tokyo Commodity Exchange in talks with US competitors
Tokyo Commodity Exchange (Tocom), the raw-material bourse that is headed for a fifth year of losses, said it was talking with US competitors to integrate trading systems and attract more participants from overseas.
"Sharing systems with another exchange would be effective in cutting costs and boosting trading beyond our traditional customers," president Tadashi Ezaki said. "I want to make a decision by the end of this year."
The commodities bourse, the largest after the New York Mercantile Exchange until 2003, slumped to 12th after Japan tightened rules to protect individual investors.
The government recommended Tocom pursue an alliance in Chicago, Singapore or Dubai to arrest a slump that threatens the survival of raw-materials trading in the third-largest economy.
Ezaki declined to identify the exchanges he had approached. During a visit to the Chicago Mercantile Exchange last March, he said Tocom would like to discuss a product-listing and trading-system alliance. The exchange, which is unlisted, trades gold, silver, platinum, palladium, rubber, petrol, kerosene, gas oil and crude oil.
CME, which includes the Chicago and New York mercantile exchanges, would be a logical partner, said Kazuhiko Saito, chief analyst at Tokyo-based Fujitomi. "Tocom is making the right moves to try to survive."
NYSE Liffe, the derivatives arm of NYSE Euronext, would be another good option, said Sadakazu Osaki, a research chief at Nomura Research Institute in Tokyo.
Michael Shore, a spokesman for CME, declined to comment on whether the company was considering a tie-up with Tocom.
Richard Adamonis, a spokesman for New York-based NYSE Euronext, also declined to comment, as did Brookly McLaughlin, a spokeswoman at Intercontinental Exchange.
CME has signed partnership deals with exchanges in Brazil, Malaysia, Mexico, India, Ukraine and others as it seeks to expand its business. Average daily trading volume that occurred outside US business hours increased to 18 per cent in the third quarter last year from 17 per cent in the second quarter.