The Hong Kong Mercantile Exchange (HKMEx) plans to launch yuan-denominated copper and gold futures contracts in the first half of this year, bringing traders from China and across the world together as the mainland's demand for commodities increases.
HKMEx president Albert Helmig said in Shanghai yesterday that the yuan gold and copper futures were expected to debut before July 1 while the bourse was preparing to launch other yuan-denominated contracts for industrial metals such as silver in the next 12 months.
Mainland authorities prohibit Chinese nationals from trading derivatives outside the mainland and Hong Kong.
'There is a rising need for Asian-focused products as market participants in the region are finding international contracts inefficient to hedge local positions,' Helmig said.
The HKMEx began operations in May. Unlike mainland commodity future exchanges, where domestic players dominate the market, Hong Kong bourses attract both Chinese and foreign traders.
The mainland is trying to improve its pricing power in the international commodities market, with domestic exchanges in Shanghai, Zhengzhou and Dalian stepping up preparations for new contracts.
The Shanghai Futures Exchange plans to introduce the mainland's first crude oil futures.
Analysts said the HKMEx should be wary of runaway investments from mainland retail investors because many still see the futures market as a way to chase short-term gains rather than as a hedging tool.
Helmig said that launching new contracts did not only depend on the exchange because investors and brokers had to be equally interested. He added that trading of the new contracts would start when sufficient numbers of traders and brokers were in place.