LME WEEK-LME owner HKEX eyes more yuan-denominated commodities contracts

By Reuters News

LONDON< Oct 19 (Reuters) - Hong Kong Exchanges and Clearing Ltd 0388.HK, owner of the London Metal Exchange, is looking at rolling out more yuan-denominated contracts to give investors more access to the Asian commodities market, its CEO said on Monday.

The LME will next week start trading a hot-rolled steel coil contract that gives international participants exposure to a yuan price benchmark in China, the world's biggest steel producer, although the contract will be settled in dollars.

HKEX, meanwhile, plans to announce details of a new yuan-denominated gold futures contract towards the end of this year.

"We are ... exploring how to give global investors broader access to Asia's commodities market with an ecosystem of products in Hong Kong, such as futures and RMB-denominated products," HKEX CEO Bonnie Chan said, referring to the Chinese currency.

The aim is to build a "comprehensive commodities ecosystem" connecting global markets to Asia, helping to drive liquidity, she added in a speech at the start of the LME Week industry gathering in London.

"The demand is there, the room for growth is there, and the ability is there. And the LME, with its expertise, time-tested institutional strengths, and commitment to continuous improvement, will play an important role in the development of that ecosystem," Chan said.

LME member Sucden Financial earlier this month called for brokerages to be allowed to execute trades in offshore yuan on the exchange.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.