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Hong Kong Stock Exchange (HKEx)is set tobecome the "enabler" to help London Metal Exchange (LME), the world's biggest metals bourse, to further expand business in Asia, HKEx chief executive Charles Li Xiaojia said in an interview on Wednesday.
His comment comes after the recent announcement that HKEx, owner of LME, will host the first LME Week Asia in Hong Kong next week, gathering leading market participants from the metals community to discuss the development, trends and opportunities within Asia's dynamic markets.
Li said he plans to make the LME's existing base metals business grow faster by lowering barriers to access to Asian market and launching new products tailored to Asian users.
"We are now cooperating with major mainland bourses towards the goal of connecting the mainland and international market, which will increase the trading volume, create opportunities to launch new products and eventually benefit the two sides," he said.
Trading in LME's existing products by Asian users, particularly from the Chinese mainland, currently faces various regulatory restrictions and barriers. Li said he hopes to remove these barriers through such ways as cooperating with mainland institutions and strengthening the LME's Asia Benchmark Price.
"We want the idea of 'Asian time zone price' to become well-established in everyone's mind, so as the eventually achieve the goal of price-setting in Asia," he said.
Li also pledged to further expand the warehouse network in Asia, which is pivotal for making the futures price converge with the physical price as the futures contracts get closer to expiry dates. This, as explained by Li, is the basis for effective hedging of metal prices fluctuation for both producers and consumers.
Taiwan's Kaohsiung port has recently been approved as the new warehouse location, making it the ninth LME delivery point in Asia, after locations in Singapore, Malaysia, Korea and Japan.
Li previously explained in his blog that the Asian market expansion is like building the "East Wing" for LME. "We'll promote the LME to Asian users so as to attract new guests to stay in our ‘East Wing’, and that’s what LME Week Asia is about," he wrote.
