DCE ACCELERATES YARN'S DEVELOPMENT (courtesy of etradingasia)
DCE ACCELERATES YARN'S DEVELOPMENT
http://asiaetrading.com/dce-accelerates-yarns-development/
Wang Tiankai President of the China Textile Industry Federation, CTIF
CCTA and CATA Hold "Expert Forum on Yarn Futures"
Recently, the China Cotton Textile Association (CCTA) and the China Commercial Circulation Association of Textile and Apparel (CATA) held the "Expert Forum on Yarn Futures" in Dalian to discuss the development of the yarn futures and the contract rules of yarn futures of Dalian Commodity Exchange (DCE) with the attendance of more than 30 leading officials and experts from industry organizations and the enterprises of spinning, weaving and distribution. Wang Tiankai, President of the China Textile Industry Federation (CTIF), attended the forum and made the concluding speech, and the forum was presided over by Xia Lingmin, Vice President of the CTIP. It was the common call of all the forum attendees to introduce the yarn futures timely in a bid to form the fair market prices and provide the enterprises with a hedging instrument under the new situation of the government intensifying the regulation of the cotton market and the imported yarn having impact on the domestic market. The listing of the yarn futures with great significance is expected to serve the industries effectively.
As DCE submitted the application to the China Securities Regulatory Commission (CSRC) for the establishment of the yarn futures project this February, the emerging of the development of the yarn futures has drawn great attention from the textile industry. Li Zhengqiang, General Manager of DCE, briefed the forum on the 20 years' development of DCE and the original purpose of developing the yarn futures at DCE. He said that in the construction and development of the futures market, DCE has always kept to the orientation toward serving the real economy, guarding against the market risks, safeguarding the principle of "openness, fairness and equality" in the market, and "equal emphasis" on both developing new products and supporting existing products. As the enterprises of the textile industry are faced with various market risks during the economic transition, DCE has applied for the establishment of the yarn futures project on the basis of thorough research to materialize the principle of serving the real economy by offering the relevant products on the futures market and providing the entity enterprises with risk management instruments. He also said that in the course of development, listing and operation of the products, DCE has always prioritized the contact with the industrial enterprises and the service, support and encouragement for the enterprises to make use of the market, and the same principle will be upheld in the development and listing of the yarn futures.
Zhu Beina, President of the CCTA, said that previously DCE and the CATA had jointly carried out survey and demonstration for the development of the yarn futures, visited enterprises of various sizes in textile distribution, cotton yarn production and weaving through purchase of yarn, and solicited the opinions of relevant national ministries and commissions. It was widely believed in the visits and exchanges that the listing of the yarn futures would be conducive to the development of the textile industry and related enterprises. As the spinning is the foundation for the textile industry, it was hoped that the introducing of the yarn futures could enhance the power of China, an important yarn manufacturer, in speaking in the market, the authoritative yarn price index could be released to serve the enterprises when the time is ripe and function as guidance in the international market, and the relevant textile enterprises could get aid in effectively predicting and judging the market. In the survey, it was suggested that the problems such as the subject matter of the yarn trading and the manners of delivery should be settled in the designing of the contract rules, and it was hoped that the cotton yarn market could maintain a steady running in the future so as to ensure the entity enterprises could successfully achieve the hedging objective and effect.
In his concluding speech, President Wang of the CTIF said that the CCTA, the CATA, and DCE had made a lot of effective efforts in the development of the yarn futures; at the forum the cotton spinning enterprises welcomed and supported the listing of the yarn futures with some enterprises even more eager for the futures to be launched as soon as possible, and the listing of the futures was in line with the current situation of the cotton yarn market. In particular, Wang pointed out that in the futures market, the CTIF was more concerned about the enterprises' attitude and whether the risks of the futures market could be put under control effectively. The functions of the futures market could not be achieved without speculation but the market must not have too much speculation. In this regard, we were deeply impressed by DCE's high level and capacity of risk control. He also said that at the forum the attendees provided pertinent opinions and suggestions on the contract rules, and to improve the operation effect after the listing of the contract, it was suggested to organize the knitting and other yarn-dependent enterprises to further the specialized research. He also hoped that DCE and the CTIP could maintain active communication and in-depth cooperation and push forward the relevant work.
Enterprises need the yarn futures under the new situation. In recent years, under the influence of the factors such as the national policy of cotton purchase and storage, the quota system of imported cotton, the impact of imported yarn, the weak downstream demand, the appreciation of the RMB exchange rate, the rising labor costs, and the financing difficulties of the SMEs, the domestic textile enterprises are in the face of various difficulties in business. According to the sources, in the first half of 2012, the textile enterprises in some regions reported a loss of RMB 2,000 in producing a ton of yarn, 105 key enterprises recorded a drop of 52.1% in profits year on year, and nearly half of the SMEs had to halt production due to too high costs.
According to an enterprise representative from Hubei Province, the implementation of the national policies of purchase and storage in the last two years has resulted in the disagreement of the prices of cotton yarn and cotton, and with the lingering weak demand and the coming of the off-season, the enterprises are faced with high risks with no hedging means. Since March 2011, the spot price of yarn has fallen from the highest RMB 39,200 per ton to RMB 25,400 per ton, a drop of more than 30%, and with the fierce price fluctuations, the enterprises need the yarn futures to manage risks. Experts from cotton and textile enterprises in Hebei Province, Jiangsu Province, and Fujian Province believe that China is a large yarn producer and consumer in the world. The continuously severe fluctuation of yarn prices in recent two years has made it necessary for yarn to be listed in futures market. They said that their companies both produce and consume cotton yarn and they can lock profits in advance through futures market. If used wisely, such method can help them to achieve zero-inventory operation, thus playing a positive role in solving the capital occupying issue and in speeding up the capital turnover of the enterprises. Meanwhile, the launching of yarn futures will help to expand enterprises' operational channel.
Providing the market with open and transparent prices to lead production is also one of the common concerns of the attending enterprises. Representatives of the manufacturing and circulation enterprises from Guangdong, Dalian and other provinces said that futures market has two basic functions, namely, price-finding and hedging. Under the current situation of the yarn industry, the yarn futures should first give full play to its price-finding function and form an open, transparent, and leading price. As there exist numerous varieties and different prices in the yarn market, a representative price is badly needed to guide the market operation. And it is hoped that the launching of yarn futures will greatly promote the current operational order of the cotton and textile market.
The representatives also believed that from the industrial level, China has over 4,000 above-scale manufacturing enterprises. However, the output volume of the largest cotton manufacturing enterprises only takes up 2% of the total. And the launching of cotton yarn futures will help to facilitate the structural adjustment and the industrial upgrading of the industry through price information. It is the common aspiration of the attending representatives to forge a star variety, build an international market pricing center, and better serve the industry development. They all believed that as China's manufacturing and consuming volume of yarn takes up about 50% of the total in the world, there will be broad development prospects for the yarn futures. Besides, DCE has relevant experience in successfully developing the plastic, coke, and other varieties which have failed or have not been developed in foreign countries. It is hoped that the yarn futures will become a star variety after its launching and thus help to make DCE an international market pricing center.
Yarn futures have basic qualifications for listing. "During the market research at the earlier stage, we found that the yarn futures have already obtained the basic qualifications for listing. First, the yarn market has a high marketization level with full price competition and no market monopoly; second, there is a sound standard for yarn, which brings great convenience for yarn checking; third, the current yarn futures trading is very smooth without any policy restriction." said Zhu Beina, Chairman of the CCTA, when introducing the research and investigation of the yarn futures faced with the expectation of enterprises.
An official of the agricultural products division of DCE further introduced the developing and listing requirements of the yarn futures. He said that apart from its high marketization level and its convenience for standardizing, the cotton yarn variety has other advantages in terms of its market constitutions, such as its large market scale, sufficient delivery amount, frequent price fluctuation, high regional correlation, convenience for storage and transportation, and clear trading flow. Therefore, its listing is of great feasibility. In recent years, DCE has strengthened its efforts on screening relevant variety system in the fields of "agriculture, farmer, and rural area". It has chosen the yarn variety as its key strategic variety for researching and developing and set up a yarn futures research group to promote relevant work in the latter half of 2012. Since the beginning of this year, DCE has, cooperated with the CTIF, gone deep in the cotton and textile enterprises of various provinces and cities to do study and research and participated the industrial conference organized by the CTIF to exchange views on developing yarn futures with spot enterprises. At present, based on the earlier research, DCE has initially formed the contract and rule design plan for the yarn futures and will submit it to the current symposium for discussion.
At the symposium, the attending representatives discussed the existing plan and put forward advices and suggestions on contract rules, delivery quality, and improving inspection method. According to the current plan, the DCE yarn futures contract will initially make the carded 32 yarn and the carded 40 yarn as the trading objects and expand the delivery scope through the premium and discount. Given the actual situation and the developing trend of the spot market, DCE will establish the futures delivery quality standard based on the international standards. And considering the manufacturing characteristics of the spot enterprises, DCE will set up 12 contract months for the convenience of spot enterprises' operation.
"Hope that industrial enterprises can come up with more advices and suggestions. Contract rule design is only the first step of a variety's listing in the market. The major indicator to test a contract is whether enterprises can accept and effectively use the contract after the variety's launching. We hope to forge an everlasting variety and we will have long-term cooperation with the industrial circle afterwards. Next, having fully absorbed all advices and suggestions, DCE will further its research and demonstration in the cotton and textile industry and continue to improve the contract rule, so as to make the yarn variety to be listed as soon as possible and better serve the industry." said Li Zhengqiang at the end of the symposium.
Filed under Commodities, Community, Cross Asset, Futures Tagged with china, CIF, crop, ctca, DCE, futures, Yarn
New Shanghai free-trade zone to lead push in futures
Beijing will soon announce a plan to allow foreign commodities exchanges to set up their own futures delivery warehouses in the mainland's first free-trade zone in Shanghai, directly challenging Singapore and South Korea's regional dominance in this business and helping Hong Kong Exchanges and Clea
via Pocket http://www.scmp.com/business/commodities/article/1279090/new-trade-zone-lead-push-futures July 10, 2013 at 07:25PM
Filed under Cross Asset Tagged with 2013, beijing, free trade zone, futures, IFTTT, Pocket, shanghai, warehouse
Dalian Commodity Exchange: Preparing For Listing Of Iron Ore Futures
While Dalian Commodity Exchange (DCE) is vigorously pushing forward the approval of the listing of the iron ore futures, on June 27, China Iron and Steel Association (CISA) held the training class of iron ore futures in Dalian with more than 200 attendees from CISA members and the institutions o
via Pocket http://www.mondovisione.com/media-and-resources/news/dalian-commodity-exchange-preparing-for-listing-of-iron-ore-futures/ July 02, 2013 at 07:43PM
Filed under Cross Asset Tagged with 2013, china iron and steel asso, cisa, dalian commodity exchange, dcr, futures, IFTTT, iron ore, Pocket
Transition from Swaps to Futures changing the global energy markets trading landscape
Before the Dodd-Frank Act was enacted, the choice for energy market traders was between swaps and futures, two separate, distinct markets, but due to new regulatory requirements, trading is increasingly occurring in listed-futures instruments, a dramatic structural shift forcing market participant
via Pocket http://www.commodities-now.com/reports/power-and-energy/14825-transition-from-swaps-to-futures-changing-the-global-energy-markets-trading-landscape.html July 01, 2013 at 06:36PM
Filed under Community, Cross Asset, ENERGY, FIX, Futures, HUB, ISV, ISVs / Vendors, MARCO POLO OPPORTUNITY Tagged with 2013, energy, energy futures, futures, IFTTT, otc, Pocket, swap futures, swaps
Connectivity Providers Pile into Equinix LD4 to Offer Access to CBOE Futures Exchange
The Chicago Board Options Exchange (CBOE) is opening the CBOE Futures Exchange (CFE) to European trading markets through exchange hosting and low-latency connectivity solutions at the Equinix LD4 co-location data centre situated to the west of London.
via Pocket http://low-latency.com/blog/connectivity-providers-pile-equinix-ld4-offer-access-cboe-futures-exchange June 29, 2013 at 02:04PM
Filed under Cross Asset Tagged with 2013, CFE, cgoe europe, connectivity, equinix, exchange, futures, IFTTT, ld4, onechicago, Pocket
The New VIX Futures Margin Requirements
It's a summer Friday, so it's not likely we see too much intraday volatility in stocks today. CBOE Market Volatility Index (VIX) futures, though, could see some serious action. Margin requirements have changed significantly since last night.
via Pocket http://www.schaeffersresearch.com/commentary/content/blogs/the+new+vix+futures+margin+requirements/trading_floor_blog.aspx June 29, 2013 at 01:51PM
Filed under Cross Asset Tagged with 2013, CBoe, cfe margin, futures, IFTTT, margin, Pocket, requirements, rg13-019, vix
EquaMetrics claims to eliminate coding from algo trading with launch of RIZM
http://www.automatedtrader.net/news/at/142908/equametrics-claims-to-eliminate-coding-from-algo-trading-with–launch-of-rizm
Cloud-based platform with intuitive algobuilder claims to reduce complexity and cost of algo trading for individual traders
New York – EquaMetrics has launched RIZM, a visual programming tool which it says can enable traders who have no prior knowledge of programming, coding or high-level mathematics, to build, to test and deploy complex algo trading strategies. EquaMetrics has spent the past two years developing RIZM and has raised $3.25 million from private angel investors to date.
Offered on a monthly subscription basis RIZM will initially support equities, futures and FX trading, with live trading connections to Interactive Brokers and Forex Capital Markets (FXCM). EquaMetrics plans to add options and fixed income trading, along with live connections to all mainstream retail and institutional brokers.
"We are putting powerful institutional tools into mainstream traders' hands with the launch of RIZM," said Amr Mohamed, EquaMetrics' CIO. "Algorithmic trading has long been the domain of only large companies that have the resources for software engineers to build and execute on every trading strategy. We created RIZM to provide an intuitive, easy-to-use interface that will provide anyone – active professional as well as non-professional traders – access to a cloud-based platform for building, back testing, simulating and executing algorithmic trading strategies. I have no doubt that within two years' time, every trader will be running automated trading strategies."
Filed under ALGO, Community, Cross Asset, Equities, FIX, FUNDS, Futures, FX, HUB, ISV, ISVs / Vendors, LATAM, MARCO POLO OPPORTUNITY, Market Data, Options Tagged with algo, Algorithm, Amr Mohamed, cloud, EquaMetrics, EquaMetrics' CIO, Forex Capital Markets, futures, fx, GXCM, IB, Interactive Brokers, RISM, strategies, trading
ICE adds interval price limit circuit breaker
Intercontinental Exchange (ICE) Group's ICE Futures US exchange has today launched interval price limit (IPL) functionality on futures contracts. The IPL system will act as a temporary circuit breaker on ICE's electronic platform.
via Pocket http://www.thetradenews.com/news/Asset_Classes/Derivatives/ICE_adds_interval_price_limit_circuit_breaker.aspx June 20, 2013 at 06:50PM
Filed under Cross Asset Tagged with 2013, circuit breaker, futures, ICE, IFTTT, interval price limit, ipl, options, Pocket, price limit
Chris Fix delivers on Asia promise for Dubai bourse
http://www.efinancialnews.com/story/2013-06-14/mitsubishi-corporation-trading-dubai-mercantile-exchange
Chris Fix, the chief executive of the Dubai Mercantile Exchange who was tasked last year with growing the Asia-Pacific membership of the exchange, has signed up its first full trading member from Japan.
Mitsubishi Corporation, one of Japan's largest trading companies, became a full DME trading house member yesterday. The exchange has also held talks with companies from elsewhere in Asia, including Korea, according to one person familiar with the situation.
Fix, who became DME chief executive in August 2012, was brought in with a mandate to grow the exchange's Asia-Pacific reach. Fix joined the exchange from French bank BNP Paribas, where he had helped build the bank's customer base in Asia four-fold during his time there.
Ahmad Sharaf, chairman of the DME, said at the time of Fix's appointment: "When we restructured the DME in February of this year, we signalled our intention to place more emphasis on the increasingly important Asian market. The appointment of Christopher Fix as the new DME chief executive, with the Asian market knowledge and experience he brings, is a real tangible expression of that commitment."
The restructuring of the DME in February 2012 saw the CME Group double its stake in the exchange to 50% and the Oman Investment Fund increase its holding to 29%.
Since the restructuring, the exchange has admitted three new members: Indian holding company Reliance Industries, RBS and Mitsubishi. The DME now has a total of 31 members.
RBS was admitted as a clearing member in March, as first reported by Financial News. Reliance and Mitsubishi have both joined as trading members.
The DME has also been trying to raise the profile of its Asian oil benchmark, based on the DME Oman Crude Oil Futures Contract. Fix said yesterday: "Mitsubishi's decision to acquire a membership is a major endorsement of DME Oman's position as the new benchmark for crude oil trading for the Asian markets.
"With the strong support of customers like Mitsubishi, DME continues to move from strength to strength and is perfectly positioned to bridge the rapidly expanding crude oil corridor between the Middle East and Asia."
–write to suzi.ring@dowjones.com and follow on Twitter: @journosooz
Filed under Commodities, Community, Cross Asset, Futures, FX Tagged with asia, Chris FIX, cme, Crude, Dubai Mercantile Excahnge, futures, oil, Oman, options