#HKEx leading the #bidding on #LME

Hong Kong Exchanges and Clearing Ltd. (HKEx), together with 3 other global exchanges (CME Group, NYSE Euronext and InterContinental Exchange), are in the final bidding for the 135-year old London Metal Exchange (LME).

The growing role of Asia, especially China, might turn out to be crucial in this bidding. Earlier this month, LME indicated that it’s considering offering traders the chance to settle its contracts in the Chinese Renminbi, because now China is the dominant force in the market, accounting for more than 40 per cent of global demand for most metals and a rapidly increasing share of trading in LME futures.

With its close ties to the Mainland China, HKEx is definitely leading the integration of China and the global commodity markets. It has announced plans for a range of renminbi-denominated commodity futures, and set aside $258 million (159 million pounds) to expand into commodities and fixed income.

But HKEx needs to overcome some financial challenge to close the deal. It’s reported to seek up to $3 billion loan for LME bid. The good news is that it has won shareholders’ approval to issue more shares when the board sees fit, paving the way for its acquisition of the LME.

Come to the Exchange Technology World Chicago and the Trading Show Chicago 2012 event to hear what big and small global exchanges think about consolidation of the market. Mr. Richard Leung, SVP of HKEx, will deliver a Keynote Address on June 27.