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China Gold Futures Market May See Explosive Development as Foreign Banks Join
Aug 24,2011 15:46CST
smm insight
Source:SMM
ANZ China becomes the second following HSBC Bank (China) Company Limited’s access to SHFE earlier this month to be allowed to perform gold futures trades on the SHFE platform.

SHANGHAI, Aug. 24 (SMM) -- Australia and New Zealand Bank (China) Company Limited (ANZ China), the subsidiary of Australia and New Zealand Banking Group Limited (ANZ) in China, announced on August 23rd Tuesday that Shanghai Futures Exchange (SHFE) approved its application to perform gold futures trades on the platform.

ANZ China was the second foreign bank following HSBC Bank (China) Company Limited’s access to SHFE earlier this month to be allowed to perform gold futures trades on the SHFE platform.

With gold prices continuously creating new records, transactions and positions of gold futures contracts have also been hitting new highs. Total positions of gold futures contracts in Shanghai hit 114,000 lots on August 23rd 2011, compared with 21,600 lots at the beginning of August. Transactions during the day also hit 229,000 lots, those compared with less than 20,000 lots at the beginning of August.

Meanwhile, SHFE is also in discussion with futures companies on launching night trading hours as a bid to connect itself with global markets. This is also an essential factor which attracted foreign banks to join SHFE.

With continuous improvement of trading rules and systems for and adding of more foreign banks into domestic gold futures market, China gold futures business will gradually globalize, therefore explosive development of domestic gold futures market may be not far away.

ANZ has been a leading market maker for gold products in the world. “Gold Futures trade is now our core business at the moment,” “ANZ’s continuous development globally enables us to provide gold value hedging products in order to meet increasing investment needs of our customers”, says Li Quan, CEO-elect of ANZ China.

ANZ became one the first few member foreign banks of SGE in 2008, and successively launched new gold products in China during following years. In 2010, ANZ China became the first foreign bank to launch forward fold products priced in RMB in SGE. It is also the first foreign bank to enter inter-bank gold rental market of China.

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