SECURITIES DAILY: THE SHFE EXPANDS RISK MANAGEMENT SPACE BY IMCI FUTURES

Updated on May 09,2014

May 9, 2014

By Ma Shuang

On May 8, the last activity of “Futures Companies Training on Derivatives Business” held by the Shanghai Futures Exchange (SHFE) in five major areas (Shanghai, Shenzhen, Chengdu, Wuhan, and Beijing) across the country closed in Beijing. The 5 training activities over the past one month have attracted nearly 1,000 staff of futures companies and have been well received in this industry. The SHFE has recorded these five training activities and uploaded them to the column “Video Library” on its official website, so that investors can further learn about its IMCI (Industrial Metal Commodity Index) futures.

Jing Chuan, a lecturer of the training activities and the deputy general manager of CITIC Securities, highly appreciated the significance of developing IMCI futures by the SHFE. He pointed out that under the current situation that global economy situation is complex and volatile and domestic economic development is entering into a new stage, the nonferrous metals industry has been facing both internal and external troubles, sever overcapacity has been seen in relevant sectors, and the structural adjustment is very hard to be conducted. At the present stage and in the future several years, nonferrous metals will present greater volatility in the price and present increasingly shorter circle. As industry development is the basis for promoting relevant derivatives, the SHFE has grasped the pulse of the industry development in time and based the development of derivatives on the industry development. Therefore, developing IMCI products will play an important role in the sound development of nonferrous metals industry and the risk management of nonferrous metals enterprises in China.

“The launching of IMCI futures by the SHFE will be the first step for China to conduct risk control and wealth management through index.” Wang Fuxuan, a training lecturer and the assistant to the president of Jinrui Futures, said that the series training activities on IMCI futures by the SHFE have fully introduced the contract design, effectively passed on the mature commodity investment concept in the world, and meanwhile listened to the demands and suggestions of all market participants. In a word, the activities have achieved great results and enabled everyone to experience the charm of China’s commodity index investment. It is hoped that the leading commodity and futures markets in China will cultivate a commodity index with world influence.

The training activities have also been well received among futures companies. Su Lihua, an analyst from CITIC futures, said that the content of the training activities is rich and practical, covering not only the macro analysis of nonferrous metals industry, the knowledge on basic index theories, and the detailed explanation on the SHFE’s IMCI futures, but also the explanation on the practical application of index, which has provided new ideas for futures companies to conduct innovative business and transformation development. Wang Yanhong, a metal analyst from Mei’erya Futures, said that in the follow-up trainings on derivatives, it is hoped that the SHFE will further expand the training scope and coverage, encourage real-enterprise clients, fund institutions, securities institutions, and banks to participate in the training, and keep improving the investor structure of the futures market.