Hong Kong Exchanges to introduce more Renminbi based futures contracts


Hong Kong Exchanges and Clearing Limited (HKEx) plans to introduce its second group of London Metal Mini Futures contracts – London Nickel Mini Futures, London Tin Mini Futures and London Lead Mini Futures it announced on Monday, pending regulatory approval and market readiness.  A timetable will be announced in due course.

The addition of the three Renminbi-denominated mini metals contracts will expand the range of commodities products HKEx offers, broaden its base of potential market participants and provide more arbitrage opportunities.  HKEx introduced its first London Metal Mini Futures contracts – London Aluminium Mini Futures, London Copper Mini Futures and London Zinc Mini Futures – in December 2014.

As those in the trading world know, in July 2012, London Metal Exchange shareholders voted to sell the historic London based exchange to Hong Kong Exchanges and Clearing for £1.4 billion ($2.1 billion USD in today’s rates), providing yet another evidence of the global focus and shift of power to the Asia-Pacific region. How much more influence will the Renminbi currency look to conquer in the years to come when it comes to denominated assets and benchmarks?

Those in FX and Renminbi markets are aware that Hong Kong remains the most important offshore RMB hub, but recent years have seen competition from Europe, including Frankfurt, London, Luxembourg, Paris, Zurich, and growing numbers of Asian cities, with the latest addition of Toronto, Canada and Doha in Qatar.

“Our strategy is to use our markets in Hong Kong and London to meet the needs of base metals users, producers and investors in different time zones,” said HKEx Chief Executive Charles Li.  “These new Renminbi-denominated contracts will provide additional hedging and risk management tools and create more arbitrage opportunities.”

“Three new London Metal Mini Futures in Hong Kong will give Asia’s market participants even greater access to the LME’s highly respected global reference prices,” said Garry Jones, HKEx’s Co-head of Global Markets and Chief Executive of the London Metal Exchange (LME).

Contract details

The three new mini metals contracts will be traded on Hong Kong Futures Exchange Limited (HKFE) and cleared through HKFE Clearing Corporation Limited.  The trading hours of the cash-settled futures contracts will be 9:00 am to 4:15 pm and 5:00 pm to 1:00 am the next morning Hong Kong time Monday to Friday, excluding the public holidays on HKEx’s trading calendar.  Pre-holiday arrangements will be the same as those for the other contracts traded on the HKFE.  Key contract specifications are shown in the table below.

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To see the official release from HKEx, click here.

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Hong Kong Exchanges to introduce more Renminbi based futures contracts

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