Hong Kong 14/06/2016 - The London Metal Exchange’s experience and brand name will help the Hong Kong Exchange and Clearing’s (HKEX) plan to build a spot trading commodity platform in Qianhai in Shenzhen, China, Charles Li, chief executive of HKEX said at LME Week Asia in Hong Kong.
“We have the LME, the brand, the experience, the expertise and our members who can help us. We are the only one who can do it,” Li said in a speech.
HKEX also has the public's trust and governance structure to the make the spot trading platform work, he said.
HKEX had published its 2016-2018 strategic report in January, where it said it is exploring the development of a China mainland spot commodity trading and financing platform capable of 'physicalising' mainland market benchmarks.
The HKEX is currently in talks with warehouse companies and looking to build its information technology system for the spot trading platform, whereby the latter could be completed by September next year, Li said later at a press conference.
China presents huge opportunities whereby there is substantial money but lacks safe assets to invest, Li added.
“There is better way to service the real economy and better way to utilise the massive savings in the system. How do we that? By providing safer assets, credible fundamental warehouses and allow physical users to access cheap financial services,” he said.
“We want to create trusted infrastructure, where the real economy can access cheaper financing and safer assets. We should be able to succeed because of the LME.”
(Additional reporting by Vicky Chen)