Hkex Will Push Renminbi Denominated Commodity Futures

The HKEx said yesterday that it will launch four new commodity futures contracts including copper, aluminum, zinc and power coal in the second half of this year, of which copper, aluminum and zinc will be priced in Renminbi. This is also the first commodity futures product launched by the Hong Kong Stock Exchange since its acquisition of the London Metal Exchange (LME) at the end of 2012. Analysts say this will not only promote the internationalization of the renminbi better, but will also be the first step in the future interconnection between the Hong Kong Stock Exchange and the mainland futures exchange.

According to the trading rules released by the HKEx, the four contracts to be launched are London aluminum. futures Small contracts, small zinc futures contracts in London, small contracts in London copper futures and API8 power coal futures contracts are 5 tons, of which the first three futures contracts will be traded and settled in Renminbi, and API8 power coal futures will be traded and settled in US dollars. It will be launched this year after obtaining regulatory approval and market readiness.

Fu Peng, chief macroeconomic adviser of Galaxy futures, told reporters that the HKEx's liquidation contract for RMB is a key step in the internationalization of RMB. RMB Become the internationally recognized valuation, settlement and reserve currency, and prepare for the next liberalization of capital account. On the one hand, the purpose of implementing small LME contracts can attract more speculative investors. On the other hand, after the opening of domestic capital account, it can also prepare domestic investors for participating in LME speculative trading.

　　 HKEx Chief executive Li Xiaojia said that the launch of four Asian commodity futures contracts this year is the initial stage, and there will be more possibilities for future development of commodity businesses. He disclosed that in addition to launching its own commodity futures exchange, the HKEx could also introduce products from other exchanges or launch products in other markets.

Since the HKEx and Shanghai Stock Exchange realized "interconnection", the industry is also looking forward to the "interconnection" between the HKEx and the mainland futures exchanges. Li Xiaojia said that the Hongkong stock market has been developing from "H-share" to "interconnection" for 20 years. He expects the commodity market to achieve the same achievements in the stock market in five years. HKEx hopes to cooperate with different exchanges on commodity business in the future, not just in Shanghai exchanges.