ICE to Start Yuan, Commodities Futures in Singapore

Intercontinental Exchange Inc. will start its first five futures contracts to be listed and cleared in Singapore next year, including products on the Chinese currency, Brent crude and gold.

A mini contract on the European energy benchmark as well as products on the yuan, Chinese cotton and sugar will be cash-settled, while a one-kilogram gold contract will be physically settled, Atlanta-based ICE said. Trade will start on March 17, subject to regulatory approval from the Monetary Authority of Singapore, it said in a statement today.

Exchanges are boosting their presence in Asia as the region’s commodity consumption rises and policy makers take steps to open up economies. ICE spent $150 million buying Singapore Mercantile Exchange Pte and its clearing house this year after Hong Kong Exchanges & Clearing Ltd. took over the world’s largest metals bourse in 2012. China plans to boost the use of its managed currency as the economic and trading influence of the top consumer of fuels and farm products grows.

“ICE selected these contracts following feedback from market participants, which emphasized the regional significance of hedging and trading,” the company said. More global and regional products are planned as ICE expands its network of exchanges and clearing houses, it said.

The new dollar-denominated contracts will be listed on ICE Futures Singapore, and cleared by ICE Clear Singapore, it said. The mini-Brent contract’s size will be 100 barrels, 1/10 of the London-listed contract run by ICE, it said. The Chinese cotton and sugar contracts are based on similar futures traded on the Zhengzhou Commodity Exchange.

Largest Users

The 99.99 percent purity kilobar contract, with local delivery, will compete with a product introduced this year by Singapore Exchange Ltd., as well as trading in the Shanghai free-trade zone offered by the Shanghai Gold Exchange. China and India are the world’s largest bullion consumers.

Singapore is an offshore trading center for the yuan, and Singapore Exchange, or SGX, started trading yuan futures in October. SGX plans to develop more products focused on China, Michael Syn, head of derivatives, said in October.

The People’s Bank of China raised the yuan’s reference rate to an eight-month high last week. The world’s second-largest economy is seeking to open its capital markets and boost yuan usage globally via trading hubs from Australia to Canada.

Shares in ICE, valued at $25.3 billion as of yesterday, are little-changed this year after a third month of gains in November offset losses in the first half. The Standard & Poor’s 500 Index climbed 12 percent in 2014.

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