New Hong Kong commodity exchange to give Asia bigger role

HONG KONG – A new commodity exchange began trading Wednesday in Hong Kong as the Asian city attempts to challenge established markets in Europe and the US.

The only product available to trade so far on the Hong Kong Mercantile Exchange is a futures contract for one kilogram of gold with physical delivery in Hong Kong.

But there are plans for other products involving precious and base metals, agriculture, energy and commodity indexes. Officials have also hinted at products denominated in yuan as investor demand grows for China’s gradually strengthening currency.

Exchange officials said that Asian countries, especially China and India, have been driving demand for global commodities and the new exchange is aimed at helping traders in the region have a bigger say in setting prices.

Trading of gold and other major commodities has traditionally been dominated by exchanges in Chicago, New York and London.

The new exchange’s 15-hour trading day will overlap with US and European trading hours, which exchange officials say will encourage cross-continent trading and boost liquidity.

Shareholders in the exchange include Industrial & Commercial Bank of China Ltd., the country’s biggest state-owned commercial lender, and Cosco Group, a state-owned shipping company. EN+ Group, a mining and energy group controlled by Russian tycoon Oleg Deripaska, is also a shareholder.