| Asia Etrader | 1 Feb, 2008 Volume 2, Issue 1 |
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The Electronic Trading Resource for Asia - Are you Connected? |
Asia Commodity ExchangesWhen you think of commodities in Asia what do you think of? Do you think of the Tokyo Commodity Exchange (TOCOM) and its Gold contract? Or do you think of the Greasy Wool futures of the Sydney Futures Exchange? Perhaps you may even think of Oman Crude Oil of the Dubai Mercantile Exchange (DME). Have you ever heard of the Multi Commodity Exchange (MCX) of India or The Agricultural Futures Exchange of Thailand (AFET) or how about the DaLian Commodity Exchange (DCE) in China? Perhaps you may think that Bursa Malaysia trades only its benchmark Kuala Lumpur Composite Index (KLCI) and the country's equity issues but it's the home of the Crude Palm Oil future (FCPO). Malaysia is the worlds largest exporter of palm oil accounting for around 50% of the world production. Palm oil is used in margarine and shortening fats among others. In addition the palm oil fruit, the source of palm oil, also produces palm kernel oil a non-edible oil used in cosmetics. For every 10 units of palm oil there is 1 unit of palm kernel oil. India has a long history of futures commodity trading. During the American Civil war (1861-1864) the British where buying cotton or the "white gold" from India to feed the looms in Lancashire and Manchester when they could no longer buy from the Americans. As early as 1875 the Bombay Cotton Exchange was established only 5 years after the Chicago Board of Trade. |
Today, the National Commodity & Derivatives Exchange (NCDEX), Multi Commodity Exchange of India (MCX) and the National Multi Commodity Exchange (NMCE) comprise the bulk of commodity exchanges in India. There are 73 products offered by India's largest commodity exchange, the MCX, alone. Spices such as Cardamom or Jeera, Metals including Aluminum (Aluminium for some), Lead and Nickel. Rice, Maize and Soybeans are just some of the grains also available for trading. It is an impressive basket of goods. The second commodity exchange, the National Commodity & Derivatives Exchange offers an equally broad product range such as Guar Seeds Please see Asia Commodity Exchanges on page 5 |
Etrading InsiderThe Ho Chi Minh City Stock Exchange (HOSE) has closed out a successful 2007. Le Hai Tra, Deputy Director of HOSE, said that the restructuring of the Stock Exchange from the Ho Chi Minh City Securities Trading Centre, along with the operations of continuous order matching, were the biggest achievements which contributed to the success of the exchange during 2007. According to data from the exchange released on January 17, HOSE held 248 trading sessions worth 244 trillion VND (15.3 billion USD) in 2007. The value represents an almost a three-time increase over 2006 |
Tra said that the exchange could achieve this success thanks to the efforts of each member of the exchange in promoting the image and the quality of the bourse last year. “The securities companies also contributed partly to the achievement, as they provided better services to customers and also helped raise the capital pouring into the market,” Tra said. During 2007, the exchange created a capitalization of 359 trillion VND (22.4 billion USD), representing 37 percent of the nation’s gross domestic products (GDP), a 138 percent increase on the previous year. Please see Etrading Insider on page 4 |
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Etrading Events FebruaryWealth Management Forum Middle East Association of Futures Markets Annual Conference Indexing & ETF Investments Asia 2008 Is there an event we should know about? Contact support@asiaetrading.com to let us know. Future Asia etrading events can be found here .
Exchange Holidays in FebruaryChina continued on the right |
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In The ZoneThe Korea Exchange (KRX) and Mongolian Stock Exchange (MSE) signed a letter of intent at the MSE headquarters in Ulan Bator January 18.Under the agreement, KRX is to help the MSE upgrade its trading infrastructure by utilizing the KRX's IT system.The promise initially follows a memorandum of understanding signed between the two sides in June 2006 when both exchanges looked forward to expanding bilateral ties in global trading. President Director of the Indonesia Stock Exchange (IDX), Mr. Erry Firmansyah (right), and the Managing Director of the Tehran Stock Exchange, Mr. Ali Rahmani, signed an MOU agreement January 29 regarding the cooperation in electronic trading, market surveillance procedures, issuers surveillance, reporting system, and information dissemination between the two Exchanges. Tokyo Stock Exchange, Inc. (TSE) began operating its New Derivatives Trading System on January 15th, 2008. In tandem with this, the TSE introduced a Give-up system for all derivatives transactions and improved the off-auction market as ToSTNeT market. Some of the rule changes include expansion of daily price limits and introduction of trading halts for JGB futures and options. |
National Stock Exchange of India Limited and CRISIL Limited have jointly sponsored the development of an online service in order to facilitate and promote the development of markets for corporate bonds and securitised debt. The website www.IndiaBondWatch.com is a comprehensive online resource for information and analysis for these markets and would be developed as a one stop shop for all information on corporate bonds and securitized debt. Dalian Commodity Exchange (DCE) announced that it set turnover and volume records for No.1 soybeans and soybean oil on January 18. The trading volume for No.1 soybeans reached 1.497 million contracts worth 67.7 billion yuan, 90,000 contracts and 3.3 billion yuan higher than the previous records respectively. For soybean oil, 615,458 contracts have been traded worth 67.01 billion yuan. January 25th Liquidnet reported that its Asia office has traded mostly difficult mid and small cap stocks in Hong Kong and Japan, with an average trade size of US$626,569, which is 34 times the average deal (trade) size on the Hong Kong Stock Exchange. Cambodia on January 22 signed an agreement with representatives from the Korea Exchange (KRX) to establish Cambodia's first stock market in 2009. Products will include equities and bonds. |
GL TRADE, the global provider of integrated software solutions to international financial institutions, announced January 21, 2008 seven financial companies are live with its middle office solution GL CLEARVISION on the Tokyo Stock Exchange (TSE). With the introduction of TSE’s give-up functionality on January 15th, GL CLEARVISION for TSE was ready to allow these firms to take advantage of its automated give-up functionality. The first batch of six Market Access Products (MAP) in the form of zero strike Derivative Warrants (DW) on non-Hong Kong (non-HK) underlying assets were listed January 30, 2008 The Stock Exchange of Hong Kong Limited. Zero strike DW tend to track closely the performance of the underlying assets. MAP are cash-settled structured products (eg zero strike or higher strike DW, exotic DW, basket DW, Callable Bull/Bear Contracts and Equity Linked Instruments) based on a wide range of non-HK underlying assets. SmartStream Technologies, the Transaction Lifecycle Management specialist, today announced Janury 30 that a new Asian clearing entity has selected TLM® Reconciliations as part of its new service offering. The new institution is based in Singapore and backed by one of the regions largest brokerages. |
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Etrading Insider from page 1 Also, the exchange by December 12 had 327,000 accounts from 320,000 local and over 7,000 overseas investors. The year 2007 marked a success for HOSE in share auctions. Through 78 auctions, the exchange earned a turnover of 36 trillion VND (2.3 billion USD), including huge initial public offering from Vietcombank. Tra said that enterprises realized how much they could earn from the listings and auctions so the number of companies rising to the bourse in 2007 was quite remarkable.
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According to Tra, the exchange would continue to run trial tests for remote trading in order to have it operating officially as soon as possible. “We will try to have the most active preparations for online trading, in order to reduce risks in both trial and official runs,” Tran Dac Sinh, General Director of HOSE said noting that online trading could be applied in the second quarter of this year. Sinh also said that the second trading session (for continuous order matching) may be longer in 2008. Cooperations with international stock exchanges are still paid a lot of attention from the managers of HOSE this year. “Overseas cooperation has created good opportunities for local companies to list their shares offshore. Also, the upgrade of management and technology systems has seemed easier. We plan to continue overseas cooperation this year, resulting in more overseas capital flowing into the local market, as well as setting up a position for the Viet Nam Stock Exchange in the global market,” Tra said.
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According to Sinh, HOSE would organise a conference for CEOs of stock exchanges in ASEAN in March. It would also open forums and road shows overseas to call more foreign investment into the stock market this year. “During 2007, the exchange found mistakes which effected the investors’ benefits. We did try out best to fix these problems to reduce losses from the mistake as much as possible,” Tra said. He added that the exchange this year would promote the management mechanism to have better management in the market. |
“We hope to lessen the mistakes and troubles, as well as protect the investors more and more, in order to have a better image this year,” Tra said, noting that the securities companies should work with the exchange to have unified development in 2008. Last year, HOSE welcomed 41 members, raising the total number of member companies to 62, with a total charter capital of 9.7 trillion VND (606.3 million USD). Source - Vietnam News Agency
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| Asia Commodity Exchanges from page 1 |
and Mustard oil but trades many of the same products as the MCX. These exchanges will undoubtedly consolidate in time which will increase liquidity, lower costs and improve price discovery. Apart from TOCOM there is the Tokyo Grain Exchange (TGE). The TGE was founded October 1952 and offers futures and cash settled futures in its agricultural products Azuki Bean, Coffee (Robusta and Arabica), Corn, Raw Silk, Soybeans, Soybean Meal and Raw and Refined Sugar. The exchange currently has 134 member firms which is 30% more than TOCOM with just 102. Electronic trading to the TGE is available from the comforts of your own home too. When electronic trading went live at the exchange October 1 2007 GL Trade was ready with its new SLE (Server Link to Exchange) via Fimat (Now part of Newedge). There is also the Central Japan Commodity Exchange (CCOM) trading 10 products Gasoline, Kerosene, Gas Oil, Eggs, Ferrous Scrap, RSS3,TSR20, the Rubber Index, Aluminum and Nickel. In September 2007 CCOM rolled out the upgrade of its electronic trading system called "Trinity-X" and has 37 members. It also signed an MOU with the Shanghai Futures Exchange late last year. The Agricultural Futures Exchange of Thailand trades "White Rice 5%" (5% means that a maximum of 5% of the rice can be broken) and "Natural Rubber Ribbed Smoked Sheet No.3" or RSS No.3 (the number 3 is the middle grading of the quality on a scale from 1 to 5 with 1 being the best as stipulated by the international Rubber Quality and Packing Conference). Thailand is also the number one producer of rubber in the world. Further still they produce "Tapioca Chip" and "Tapioca Starch Premium Grade". Tapioca is produced from the cassava plant and Thailand is the number 3 producer in the world behind Brazil and Nigeria. In China there is the DaLian Commodity Exchange (DCE) as previously mentioned and there is also the Zhengzhou Commodity Exchange (ZCE) trading in |
cotton, sugar, hard winter wheat and strong gluten wheat, PTA (Pure Terephthalic Acid) and rapeseed oil. The DCE trades Corn, 2 types of Soybeans, Soybean Meal, Soybean Oil, LLDPE (Linear Low Density Polyethylene) and RDB Palm Oil (Refined, Bleached and Doedorised). The Corn futures rank in the top 3 commodity futures in the world by volume and the Soymeal futures in the top 20. There is also the Shanghai Futures Exchange (SHFE) primarily specializing in metals namely Aluminum, Copper, Gold, Zinc, Rubber and Fuel Oil. The gold future was launched only on January 9, 2008; a 1kg contract just like the one on TOCOM. All we need now is a standard Yen/Renminbi currency future contract and we are ready to arbitrage. Incidentally, MCX gold in India is a 1kg contract too. Vendors? As the world grows richer and consumption grows with it commodities in Asia can only flourish. Nations and her farmers will seek to hedge their crops and extra-exchange arbitrage trading of similar commodities will increase as regulation matures and trade continues to open. Prescient regulators, brokers, risk managers and ISVs stand to benefit.
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