New bourse to promote Hong Kong’s gold trading
Tue Dec 17 2024
Commodities-trading industry experts are urging the Hong Kong Special Administrative Region government to hasten the development of world-class gold storage facilities in the city to promote Hong Kong as an international gold trading center.
On Friday, the Chinese Gold and Silver Exchange was officially renamed the Hong Kong Gold Exchange. It takes over all gold and silver trading business starting next year.
The three members of the exchange — Haywood Cheung Takhay, Robert Lee Wai-wang and Tse Moon-chuen — have been appointed as the nonofficial members of the Working Group on Promoting Gold Market Development.
The SAR government announced on Wednesday the establishment of a working group for promoting gold market development under the Financial Services and the Treasury Bureau, in response to Chief Executive John Lee Ka-chiu’s announcement in the 2024 Policy Address.
Chaired by the secretary for financial services and the Treasury, the working group will comprehensively review all aspects relating to the development of a gold market, take forward the establishment of an international gold trading center, and formulate plans on enhancing the trading and regulatory mechanisms of the market.
The three nonofficial members of the working group all said that developing world-class gold storage facilities in the city is paramount.
“We suggest establishing a gold warehouse in Hong Kong that is recognized by international financial institutions to advance the push of developing Hong Kong into an international gold trading center,” Cheung, chairman of the Hong Kong Gold Exchange, said at the news conference on Friday.
But the chairman pointed out that one warehouse facility may not be enough. “I believe another warehouse could be established in the area of the Northern Metropolis or the Loop. This will bring convenience and also will be conducive to exploring mutual access with the Chinese mainland commodities trading market,” Cheung said.
Since 2009, the Airport Authority Hong Kong has been operating a precious metals depository at Hong Kong International Airport.
The depository’s capacity will be expanded from 150 metric tons to 200 tons initially, with plans to increase it to 1,000 tons in later stages, the SAR government revealed.
The three nonofficial members of the working group emphasized that building more gold-storage facilities in Hong Kong would facilitate investors to maintain their gold holdings in the city, thus bolstering more financial derivate products in collateral, loan and hedging related to gold trading, and creating a comprehensive ecosystem in gold trading.
Based on increased storage, services in insurance, testing and certification, logistics and others related to gold trading will also be strengthened.
Cheung added: “After the establishment of the gold exchange, the important work is to improve the exchange’s transparency and corporate governance, and recruit international members. The exchange is expected to launch digital gold trading services in the future.”
He said that the exchange will start discussions on gold certification, branding and standards.
“The nonofficial members of the working group come from diverse backgrounds, including members from traditional financial institutions, banks and investment banks. I am confident that they can comprehensively promote the development of the gold market,” added Robert Lee, who is also a Legislative Council member representing the financial services sector.
Source: https://www.chinadailyhk.com/hk/