Hong Kong market queries HKEx commodities shift

Author: | Published: 20 Jan 2012

The Hong Kong stock exchange (HKEx) is to refocus on commodities as opportunities slow in the equities market. But market participants are questioning the rationale behind the move.

HKEx chief executive, Charles Li, said Thursday the time had come for the bourse to move away from stock and initial public offerings (IPOs) in order to exploit China's growing demand for commodities.

As a country dominating commodities consumption and production and with no say in determining product prices, the opportunities in China are huge, he said. He added that the HKEx is uniquely positioned to capitalise on that.

Providing renminbi-denominated commodities, for example, would allow investors to trade and hedge their risk in renminbi and commodities in an Asian time zone, he said. "If we don’t move to fill that gap soon somebody else will and Hong Kong is forever left out."

But the former Hong Kong Clearing and Exchanges’...