Asian commodity markets ponder foreign link-ups<\/p>\n
SINGAPORE (Reuter): Commodity exchanges in Southeast Asia are
\neying strategic links with offshore markets to widen their base
\nand speed up growth, but officials said no mergers were planned.<\/p>\n
Reacting to a wave of possible mergers and tie-ups among
\nWestern markets, the officials said they were looking to launch
\njoint contracts or introduce mutual settlement of contracts with
\nU.S. or other markets.<\/p>\n
"We are looking at it," Lim Toh Eng, general manager of the
\nSingapore Commodity Exchange (Sicom), told Reuters Tuesday. "We
\ncannot exclude the idea of having working relationships with some
\nexchanges at some point."<\/p>\n
Sicom, which mainly trades in rubber, recently added a Robusta
\ncoffee contract tailored along the lines of the London Commodity
\nExchange's (LCE) coffee contract.<\/p>\n
Industry analysts said Asia's booming economies would open up
\nmore opportunities for hedging and arbitrage business during the
\nregion's trading time.<\/p>\n
"The growth in the futures industry is definitely here," one
\nAsian analyst said. "The CBOT (Chicago Board of Trade), for
\ninstance, is concerned over its static grains volume at the
\nexpense of Chinese and Japanese exchanges.<\/p>\n
"There will be more link-up arrangements between Western and
\nAsian exchanges as this will benefit both of them," he said.<\/p>\n
Kuala Lumpur Commodity Exchange (KLCE) chief executive Syed
\nJabbar Shahabuddin said the Malaysian exchange was exploring the
\nidea of establishing joint cooperation but stressed that any
\nmarriage should be mutually beneficial.<\/p>\n
"We are always open to the idea," he said. "But in any joint
\nventures, two parties must be convinced that they will benefit."<\/p>\n
Industry sources said the KLCE planned to work jointly with
\nNew York's Coffee, Sugar and Cocoa Exchange Inc (CSCE) to develop
\nthe Malaysian exchange's cocoa contract.<\/p>\n
Among the latest merger news, the CSCE revealed two weeks ago
\nit was pursuing a takeover bid for the LCE.<\/p>\n
The New York Mercantile Exchange (NYMEX) has separately
\nproposed consolidation or merger with the CSCE. But CSCE
\nofficials said this week further discussions on consolidation
\nwith NYMEX must include the New York Cotton Exchange.<\/p>\n
Plans<\/p>\n
Malaysia's KLCE now relies solely on its flagship crude palm
\noil (CPO) contract. Syed Jabbar said in April the KLCE was
\nstudying plans to set up a regional lauric oil futures market.<\/p>\n
He said the KLCE was discussing issues such as delivery
\nproblems, and options for cash settlement with Indonesia and the
\nPhilippines, the world's major coconut oil producers.<\/p>\n
He also said the KLCE and China's Commodity Futures Exchange
\n(CCFE) were discussing mutual hedging cooperation.<\/p>\n
"They (Chinese traders and consumers) have a choice of the
\npalm oil futures contract on the CCFE or the CPO futures traded
\non the KLCE," Syed Jabbar told Reuters recently.<\/p>\n
Patrick Poon, vice-president of the Manila International
\nFutures Exchange (MIFE), said it had opened talks with the CBOT
\non the possibility of facilitating mutual settlement of contracts
\nin the two exchanges.<\/p>\n
MIFE trades in a wide range of commodity and financial
\nderivatives.<\/p>\n
Elsewhere in the Asia-Pacific region, the Sydney Futures
\nExchange is negotiating with the Tokyo Grains Exchange about
\nsetting up a grain-fed cattle contract early in 1996.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-commodity-markets-ponder-foreign-link-ups-1447893297",
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"sponsor": "Okusi Associates",
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