Futures Daily: SHFE Instructs Business Stabilization with Futures

Updated on: September 27, 2016

Reported by: Cui Lei, Journalist from Futures Daily

FDR News  Thematic Event on Supply-side Reform and Finance Serving Entities co-hosted by Jiangsu Securities Exchange Administration and Shanghai Futures Exchanges and sponsored by Chuang Yuan Futures was held in Suzhou on September 23. The Event was mainly aimed at listed companies and some NEEQ companies in Suzhou, helping them to find out methods and modes for pricing and risk management through cash and futures integration and utilization derivative instruments.
Zhang Peng, President Assistant of Chuang Yuan Futures and GM of Asset Management Department introduced two modes for application of financial products to corporate risk management to all participating corporate management: First is the utilization of options and OTC options and second depository receipts hooked to bulk commodities. According to him, enterprise may obtain financing through financial product innovation, such as expanding a new financing channel by means of asset management business by futures company. In addition, enterprises may also realize strategic development by leveraging derivative instruments including futures. On one hand, hedging function of the futures market helps to stabilize operation and expand market share; on the other hand, application for registering transaction brands and warehouses at commodity futures exchange may improve sales capacity and brand influence of enterprises.