Launch of HKEx Asia Commodities New Products. 22 April 2014

Transcription

1 Launch of HKEx Asia Commodities New Products 22 April 2014

2 Key Topics 1 Review of HKEx Strategy and How Asia Commodities New Products Fit into It Charles Li Chief Executive, HKEx Group 2 Overview of HKEx Asia Commodities New Products Rebecca Brosnan Managing Director, Head of Asia Commodities 2

3 Our Vision Be the international exchange of choice for our Chinese clients and the China exchange of choice for our international clients Coordinated Collaborative Access Complementary 3

4 Review of HKEx Strategy 2010: The Start Trading Hours Kick-off OTC Clear 2011: RMB Capability RMB Trading Support Facility Dual Tranche, Dual Counter Model Major international listings 2012: Acquisition of the LME Acquisition of the LME Risk Management Reform Measures CESC JV 2013: Mutual Market Access Discussion of Mutual Market Access Launch OTC Clear After Hours Futures Trading Stock Options Revamp 2014: Across All Asset Classes Shanghai-Hong Kong Stock Connect Asia Commodities 4

5 Growth Drivers Across Asset Classes Cash Equity FIC Commodities Equity Derivatives RMB Products Base Metals Continued organic growth limited upside Structural upside mutual market access Further product expansion Significant upside depends on mutual market access Beginning of a long march Cooperation with China is critical to success Already global leader in base metals Commercialise LME and roll-out LME Clear and Hong Kong commodities platform Mutual Market Access is the main transformative growth driver Clearing is a key differentiating value proposition 5

6 Key Goals of Accelerate Mutual Market Access Market Enhancement E Q U I T I E S FIC Products RMB Risk Management RMB OTC Clear C O M L M O D M I T E I E S Clearing & Commercialisation Asia Commodities 1 2 Ready, Set and Go Launch in HK 6

7 Mutual Market Access Equities (Shanghai-Hong Kong Stock Connect) Mainland ChinaClear SSE SSE Members/ ChinaClear Participants Mainland investors* Southbound A Shares Eligible Shares Clearing Link Net Order Routing Order Routing Net Clearing Link Eligible Shares Hong Kong Shares Northbound HK & overseas investors EPs/CPs SEHK Hong Kong HKSCC *Note: Only eligible Mainland investors can participate in Southbound trading 7

8 Mutual Market Access Commodities What are the possibilities? Futures Market Mainland Spot Market Mainland Exchanges Southbound Futures Products Cross-Listing Products Mainland Participants / Users Mainland Spot Market Cross-Listing Products Futures Products LME Products Northbound International Participants / Users International Spot Market HKEx Group Hong Kong 8

9 From Dream to Reality, Depends On Shared Dream Shared Vision Shared Interests 9

10 Key Topics 1 Review of HKEx Strategy and How Asia Commodities New Products Fit into It Charles Li Chief Executive, HKEx Group 2 Overview of HKEx Asia Commodities New Products Rebecca Brosnan Managing Director, Head of Asia Commodities 10

11 Building Blocks for Asia Commodities Products LME s Core Strengths Base Metals Distribution Physical Market Acceptance Hard Commodities Relationships Branding HKEx s Core Strengths Asia Time Zone Greater China Proximity RMB Ready Mainland EP Distribution Launch Asia Commodities Platform in Hong Kong 1. Individual Products - Product Choice - China Relevance - Distribution 2. Mainland Connectivity - Chinese Exchanges - Business Cooperation - Distribution In order to launch the new platform we had to leverage our core strengths 11

12 Rationale Hong Kong Platform China International Distribution via HKFE 34 Mainland EPs Global Trading On-screen Block trade Currency RMB/USD Match physical trading Free capital flow Contract Size Arbitrage w/ SHFE/ZCE Attract retail Time Zone Asian trading hours Overnight market 12

13 Why Metals and Coal? Aluminium Copper Zinc Thermal Coal Major Users Construction Packaging Transportation Automotive Construction Electronics Automotive Construction Automotive Batteries Electricity China % of World Consumption 45% 44% 44% 45% YOY Growth in % 11% 11% 5% 13

14 Asia Commodities New Products Outline London Aluminium Mini Futures London Copper Mini Futures London Zinc Mini Futures API 8 Thermal Coal Futures Contract Size 5 tonnes 200 tonnes Trading and Settlement Currency Contract Months Trading Hours RMB Spot Month and the next eleven calendar months (monthly contracts) 9:00am to 4:15pm (day trading session) and 5:00pm to 1:00am (after-hours trading session) US dollar Spot Month and the next twenty-three calendar months (monthly contracts) 8:00am to 4:15pm (day trading session) and 5:00pm to 1:00am(after-hours trading session) Trading Platform Last Trading Day Final Settlement Price Settlement Method Holiday Schedule Two business days before the third Wednesday of the spot month Official Settlement Price determined and published by the LME on the Last Trading Day HKATS Cash-settled Follow HKEx holiday schedule The last Friday of the Contract Month The monthly average API 8 Index published in the Argus/McCloskey's Coal Price Index Report on the last Friday of the expiring Contract Month 14

15 Who Will Trade These Products? Chinese Retail Investors Traditional Metals Brokers Physical Players Various liquidity provider programmes aim to incentivise different types of market players 15

16 Q & A HKEx Group Website: HKExnews Website: 16