Hong Kong Exchanges and Clearing (HKEx) plans to launch new initiatives such as on onshore China commodities platform and a way for foreign companies to launch offerings in the mainland via the Hong Kong-Shanghai Stock Connect program, its CEO said.
At a media briefing Thursday, Charles Li said the initiatives will be launched between 2016 and 2018 as part of the exchange’s strategy to increase its China focus and offer more products and services.
HKEx will explore how to “allow international issuers through the Connect model to make offerings into China” and vice versa, Li said. At the same time, it will review its listing requirements for overseas companies.
The exchange will begin building a spot commodity trading platform on the mainland, to develop credible pricing benchmarks, Li said.
“We will explore creating a spot commodity trading and financing platform in mainland China, most likely across the border in Shenzhen. We think we are very well placed to fill a gap in the market,” he said.
The Hong Kong bourse will also begin to work more directly with the London Metals Exchange (LME). It will start by opening avenues for HKEx participants to trade and clear LME products.
It is also assessing new precious and ferrous metals products as well as other products in the base and steel supply chains in London and Hong Kong.
Among its new initiatives, Li said HKEx will add exchange-traded funds and listed bonds to Stock Connect, offer more yuan currency, onshore interest rate derivative products and A-share index futures and also LME products in adjacent commodities.
HKEx, which enjoys a monopoly over stock trading in the city, has long held a special status as China’s preferred partner to help open up its capital markets, a unique position that the bourse has been trying to exploit through a series of “China Connect” initiatives including a landmark Hong Kong-Shanghai trading link.