Singapore 09/09/2016 - The Hong Kong Exchanges and Clearing Limited (HKEX) and China’s Shandong provincial government have a signed a Memorandum of Understanding aimed at supporting and promoting future developments in the commodities and capital markets.
The signing on Thursday comes as the HKEX advances its spot commodity trading platform project in Qianhai in Shenzhen southern China, and engages in active discussion with major foreign and domestic warehousing companies in preparation for its launch which is expected by May next year.
"HKEX aims to work closely with Shandong's government, financial institutions and warehouse companies to support the further growth of the province's physical economy through opportunities in spot commodity trading and the internationalisation of warehousing," Charles Li, HKEX’s chief executive, said in a statement on Thursday.
HKEX wants to ‘physicalise’ the mainland’s commodities market through its platform and create a model similar to that of its subsidiary, the London Metal Exchange.
China presents huge opportunities whereby there is substantial money a lack of safe assets for investors to invest in, and the HKEX hopes that its spot trading platform – through the company’s expertise and reputation – will fill the gap and at the same time allow physical users to access funding via metal financing, Li had said in the past.
The Shenzhen government will take a minority stake in the spot commodity platform, Li had revealed at an industry event in Singapore this week.