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QINGDAO TODAY
在线翻译:
szdaily -> Business/Markets -> 
HK exchange eyes metals expansion
    2019-05-08  08:53    Shenzhen Daily

HONG KONG stock exchange chief executive Charles Li said yesterday that the exchange was in official talks with Guangdong authorities on metals warehousing, a major step towards its long-held aim of expanding on the mainland.

Li, head of Hong Kong Exchanges and Clearing Ltd. (HKEX), has long wished for a warehousing foothold on the mainland to boost its London Metal Exchange (LME) franchise, but has faced reluctance from regulators concerned with protecting emerging domestic exchanges in the world’s biggest consumer of metals.

“We have been talking about LME warehousing on the mainland, it’s not going to be an easy subject,” said Li, speaking at an event in Hong Kong. “We are working with the Guangdong government (to see) if we can experiment a pilot program for warehousing.”

Warehouses are a critical part of the LME’s price-setting function because they act as a market of last resort, a place of storage for sellers in need, and a store of metal for buyers in a mechanism that roots exchange prices in the physical market.

The plan involving Guangdong Province would come under the country’s Greater Bay Area project, Li said. The project aims to better integrate the economies of Guangdong, Hong Kong and Macao, spurring growth in the regions.

The exchange still requires consent from regulators to go ahead with the pilot plan, Li added.

The exchange is also planning to expand products under its mainland spot physical exchange, the Qianhai Mercantile Exchange (QME), by adding aluminum ingots in the third quarter of this year, followed by T-bar aluminum, and copper probably next year, Li added.

It will continue to look at cross-listing or clearing products from other commodity exchanges, he said.

Meanwhile, the Hong Kong Futures Exchange plans to launch U.S. dollar-denominated mini contracts for six base metals in the coming months, said Robin Martin, the head of market development at the LME, which HKEX bought in 2012.

The standardized monthly futures contracts will reference LME prices and are being launched to “broaden access in the region for LME priced contracts,” Martin told an industry event in Hong Kong. They will be aimed at retail investors.

(SD-Agencies)

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