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Chinese Futures Brokerages Launched Global Settlements in a Whisper

A few days ago, 201.6 tonnes technically specified rubber (TSR) 20 passed qualification check of China Certification & Inspection Group Shandong Co., Ltd. were manufactured in bonded futures delivery warehouse of Sinotrans Limited (referred to as "Sinotrans") in Shangdong Pilot Free Trade Zone.

The lot of TSR was manufactured by Von Bundit AJ1 Factory in Thailand. The ownership belonged to a South East Asian Trading firm. Later stage of processing the lot included pledge by warehouse receipts and physical delivery. It indicated the subsidiary of Nanhua Futures (603903) had equipped with the ability to serve clients in warehouse bill generationpledges by warehouse receipts and physical delivery.

TSR20, as the second “Global-platform, RMB denominated” futures contract of Shanghai Futures Exchange(SFE), had properly connected the Futures market of China and the overseas markets. In the natural rubber industry, TSR 20 was of the major usage among low-end tire industry. So China imported a large amount of TSR 20. This Pledge by Warehouse Receipts not only realized the recognition of businesses to SFE, TSR 20 and Futures brokerages companies, it also symbolized the effective path of low-end tire industry for standard hedging. With experience in physical pledge by warehouse receipts, qualification checks, overseas companies would get familiar with the China futures market, better use the futures market to promote the trading relationship of China and the Association of Southeast Asian Nations (ASEAN). In the futures, more physical corporations in South East Asia would enter China Futures Market, driving related industries development to perfection.

Since going public on 12 Aug 2019 to 4 Dec 2019, TSR20 transactions in SFE had accumulated 621 thousand lots, equal to 64.09 billion RMB turnover value and net exposure of 54.6 thousand lots. 3 months since IPO, TSR20 market capitalization had already exceeded the similar product market internationally. HGNH International, which entered settlement business of Hong Kong, Chicago, London and Singapore earlier, had acquired the ability to be a global major clearance center. Also, HGNH International proactively improved and perfected its ability for TSR 20 FOB clearance in Singapore Exchange Limited, settlement facilities and abilities to handle pledge by warehouse receipts of 3 cigarette adhesive in Japan TOM exchange. By now, a lot of Southeast Asian famous rubber trading firms, manufacturers participated in rubber futures trading through NGNH International. This warehouse receipt generation also marked overseas branch of China Futures brokerage represented by HGNH servicing overseas clients through local futures market to do hedging, warehouse receipt delivery and facilities’ further completion, indicating our companies’ ability to serve global physical economy further enhancement.

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Disclaimer: This report is a translated version. The content of this report is solely for the purpose of providing information, and is only used for general reference purposes, not to induce investment and other behaviors. The contents of this report have replaced the published information and may be selected by third-party suppliers or other reference materials or sources. Although we believe the reliability of the information in the report, we do not guarantee the accuracy and precision of this information. If the original text is quoted and published, the source must be “CN First International Futures Limited” and all rights of investigation shall be reserved. Reference source: http://www.cs.com.cn/zzqh/spqh/202001/t20200121_6018972.html?from=singlemessage&isappinstalled=0

2020/01/27
CN First International Futures Limited