HKEx and smaller rival to jointly push market
Hong Kong Exchanges and Clearing and the city's 98-year-old gold exchange have ended their dispute over trading of the precious metal, with plans to jointly develop the increasingly lucrative bullion market.
The stock market operator and the Chinese Gold & Silver Exchange Society have agreed to a working group that could pave the way for electronic trading of the so-called 'London gold' in the first half of the year and the launch of futures and options.
The decision marks a turnaround in the previously tense relations between the HKEx and the gold exchange, where traders still use the 'open outcry' system. Gold surged by more than 30 per cent last year, fuelling investor interest and sparking a race to launch new bullion products. London gold yesterday closed at US$925 an ounce.
Gold exchange president William Lee Tak-lun, who last month said the HKEx's plan to introduce gold futures amounted to bullying, yesterday said the co-operation agreement could herald a possible merger between the two bourses.
'We hope this is the first step of co-operation between the two exchanges,' Mr Lee said. 'In the next stage, we could consider if there is any chance for us to merge.'
However, regulatory sources said that because the gold exchange was not regulated by the Securities and Futures Commission, a takeover by the HKEx would be difficult.