Hong Kong is set to launch its first commodities exchange early next year to capitalise on the mainland's growing demand for oil and other raw materials, officials said Wednesday.
The Hong Kong Mercantile Exchange (HKMEx) will initially sell contracts on fuel oil, with other commodities following, the exchange said in a statement announcing its formation.
It will "better reflect mainland China's underlying supply and demand, and enable Chinese traders to have more pricing power in the world's commodities markets," said Barry Cheung, HKMEx chairman and former deputy head of Titan Petrochemical, the Hong Kong-listed subsidiary of a Singapore company. Thomas McMahon, a former vice president and director of the New York Mercantile Exchange (NYMEX) Asia, will be president.
The group expected to obtain the all-clear from the Securities and Futures Commission by end of the year, and estimated trading would start in the first quarter of next year. The creation of the exchange has the backing of the government, with the city's financial secretary saying: "There is a huge opportunity for Hong Kong to develop a commodities futures market that can cater to the mainland and we are delighted to see the creation of HKMEx to accommodate these needs."
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