SGX, the Singapore exchange, has hired a top executive at China’s Citic Securities International to head a new office in Hong Kong as part of a focus on drumming up business in Asia amid intensifying competition from exchanges in China.
Ringo Chiu, former chief operating officer at Citic Securities International, will join the Singapore bourse in a newly created job based in Hong Kong that will focus on derivatives, three people familiar with the matter said. SGX has a sales office in Beijing.
Mr Chiu is also a former chief information officer at the Securities and Futures Commission, Hong Kong’s financial watchdog.
Citic Securities International is the arm of the Citic Securities group responsible for spearheading the broker’s expansion outside China. Hong Kong is home to around 50 Chinese futures brokers licensed to conduct futures business on global exchanges.
The move by SGX highlights its increasing focus on generating business from Chinese customers – as its western rivals CME Group and IntercontinentalExchange are also doing.
This week SGX said it would launch nine more commodity derivatives contracts over the next two months in coal and iron ore, after reporting record monthly volume in iron ore futures, its most active commodity derivatives contract.
The Singapore bourse, which earns around 28 per cent of group revenues from derivatives, plans to use Mr Chiu’s appointment in particular to attract business from retail investors. That is the same strategy pursued by SGX’s rivals on the Chinese mainland, as well as by Hong Kong Exchanges & Clearing (HKEx).
HKEx and the London Metal Exchange last month unveiled the first set of new products that will be offered on the London bourse since it was acquired by HKEx last year. They are renminbi-denominated futures for zinc, copper and nickel, and a US dollar contract for thermal coal.
The contracts are smaller than derivatives ones aimed at institutional investors. Such smaller contract sizes are typical of the soyabean and iron ore futures contracts listed on the Dalian Commodity Exchange, reflecting the relatively large share of trading in derivatives by Chinese retail investors on the mainland.
SGX, whose derivatives markets are used mostly by institutional traders, aims to use its Hong Kong office to tap into the same retail market in China, one person said, as demand from Chinese traders, especially for commodity derivatives, is set to grow.
Subject to regulatory approval it will introduce options-on-futures for iron ore and freight next month, adding coking coal derivatives based on key export and import price indices in July. The same month will see the launch of Asian thermal coal derivatives.
SGX has in recent months been building closer ties with Chinese exchanges, including signing in March a memorandum of understanding with the Dalian bourse to explore co-operation including development of new commodity derivative products.
That followed a similar deal with the Shanghai Futures Exchange in October to explore joint development of derivatives for energy, metals, chemicals and commodity indices.
新加坡交易所(SGX)聘请了中国中信证券国际(Citic Securities International)的一名前高管，由其挂帅香港的一个新办事处，此举是新交所在来自中国同行的竞争不断加剧之际拓展亚洲业务的一部分。
赵国强也是香港金融监管机构——证券及期货事务监察委员会(Securities and Futures Commission)的前首席信息官。
新交所此举凸显其越来越着重于争取中国客户的业务；其西方竞争对手芝加哥商品交易所集团(CME Group)和洲际交易所(Intercontinental Exchange)目前也在这么做。