Our government may need to review whether the green light given to the local bourse to spend so much on the London Metal Exchange was the right decision. We have found no evidence to show the deal will encourage commodities trading here.
In fact, Hong Kong brokers and investors have paid scant attention to the continuing annual LME Week in London, which shows the mega deal last December has failed to promote commodities trading here.
The Hong Kong government - Hong Kong Exchanges and Clearing's largest shareholder - threw its weight behind the LME deal as it believed it would help promote the city as a commodities trading centre.
But now, 10 months on, nothing has happened.
No new commodities products are trading here, nor do we see our brokers or investors understanding more about commodities trading.
Commodities trading in Hong Kong appears to be shrinking. We have one less exchange trading commodities after the ill-fated Hong Kong Mercantile Exchange shut its doors in May after two years of trading gold and silver contracts. The turnover was so thin that on its last trading day, only 181 contracts were left to be settled.
LME, which has warehouses worldwide, has no exposure in China and has not yet gained official blessing to open one on the mainland even though it is now part of HKEx.
So far, the only events promoting commodities in the city after the deal have been the LME Weeks - one held in Hong Kong in June and another in London where it is held annually every October. This week, the entire HKEx board of directors flew to London to attend LME Week where metal traders went to a two-day seminar and workshop. HKEx will also have a board meeting in London on Wednesday - its first such meeting held overseas.
But having the directors pose for publicity shots is likely to do little to promote commodities trading here.
We want to see more. First, we need good commodities products trading here. Some Hong Kong-based brokers are now helping mainland clients to trade commodities products on the LME. If these products are trading here, it may help Hong Kong to develop a real commodities market.
The only HKEx-traded commodities product now is gold futures, but that was introduced before the LME acquisition. It is also a failed product as there has been no trading this year.
In terms of members, only Bank of China Group's BOC International is a member of the LME. No locally based brokers or banks are on the list and we see no plan for any cross membership or link up.
Having a board meeting in London is just PR . We want real reform to promote commodities trading in Hong Kong, instead of show business.