Singapore: A pan-Asian commodity derivatives exchange based in Singapore aims to start trading early next year, the Indian firm spearheading the project said Wednesday.
The Singapore Mercantile Exchange (SMX) will offer electronic futures trading in a wide array of products including energy and metals, said the Indian firm, Financial Technologies.
With an initial capitalization of 50 million Singapore dollars ($37 million), it is expected to begin trades in the first quarter of 2009, said Financial Technologies.
Ang Swee Tian, SMX chairman, said the exchange would reflect Asia’s position as a major producer and consumer of commodities including oil, rice and precious metals.
The announcement comes after Hong Kong, widely seen as Singapore’s main commercial rival in the region, announced in June plans to start a commodities exchange early next year.
The Hong Kong Mercantile Exchange, which will initially sell contracts on fuel oil, is aimed at capitalising on China’s growing demand for energy and other raw materials, officials said.
The world’s main commodities exchanges are located in the US and Europe, which offers limited opportunities for Asia because of the different time zones, said Ang.
Singapore Mercantile Exchange said it was in the process of obtaining regulatory approval from the Monetary Authority of Singapore.
The Singapore Exchange and Chicago Board of Trade launched a derivatives market for Asia-based commodities in September 2006, but it was discontinued late the following year.