HKEx eyes turnover boost after LME deal

Hong Kong Exchanges and Clearing, the local stock and futures markets operator, expects turnover at the newly acquired London Metal Exchange to continue rising as a result of increasing demand for commodities from China, chairman Chow Chung Kong told the South China Morning Post.

The exchange would now need to focus on integrating with the LME, including helping the London bourse complete its move from a profit-constrained business model to a commercial one, he added. In terms of management and brand name, Chow does not think HKEx needs to merge the two exchanges.

"LME is a good brand and it has a team of experienced managers. We can let it run independently but there would be some crossover of directors," he said.

Chow is now a director of LME, and Martin Abbott, while remaining chief executive of LME, has become co-head of HKEx's newly created global markets division, which oversees the equities, fixed-income, currency and commodities businesses, including the LME.

Chow said the HKEx would help LME to set up its own clearing house and assist it in expanding in China and other Asian markets. LME, which has warehouses around the globe for physical delivery, does not have a presence in China.

He also said LME would add Asia trading time zones while HKEx would introduce a platform to trade LME products.

"HKEx's background and connection would help the LME to develop in Asia," Chow said. "Likewise, the experience and platform of the LME would allow HKEx to develop into commodities trading."