Gold futures and options are likely to be launched on the Hong Kong exchange this year, pending regulatory approval.

 

The exchange also plans to bring in depository receipts in the third quarter, similar to those in the United States, to allow more overseas companies to list on the world's second largest listed bourse.

 

Gold products will be launched first, said Paul Chow, chief executive of Hong Kong Exchanges and Clearing Ltd (HKEx), yesterday.

 

"With the approval of the Securities and Futures Commission, the products can probably be launched by the end of this year," he said.

 

The Shanghai Futures Exchange launched gold futures last week. But Chow declined to comment on whether Hong Kong is lagging behind. "Hong Kong and the mainland are two different markets," he said.

 

Chow added that the mainland's gold futures market targets local buyers, while Hong Kong is open to global investors.

 

Bruce Wong, Taifook Securities forex and bullion research director, said demand for gold is higher than for other commodities in Hong Kong, so it's appropriate for HKEx to launch gold futures and options first.

 

Compared with Shanghai, Wong said: "The Hong Kong market can attract Asian investors. We have not been left behind."

 

HKEx will also seek more foreign listings on the bourse this year.

 

Chow said the exchange would likely introduce a depository receipt scheme in the third quarter.

 

"The program is an alternative for foreign firms to list stock in Hong Kong," he said, denying that the plan was a response to the lack of big listings from mainland firms.

 

HKEx officials visited Vietnam, Malaysia and India last year to promote Hong Kong.

 

Patrick Shum, executive director of Karl Thomson Investment, said allowing foreign companies to list via depositary receipt was a good move that would benefit local investors and could draw global companies like IBM, Citigroup and Apple.

 

(China Daily January 17, 2008)