Bursa aims to double derivatives trade volume

This is written by my colleague Zaidi Isham Ismail.

BURSA Malaysia Derivatives Bhd aims to double its daily trading average to 50,000 contracts over the next three years in line with growing investor interest. As at end of February, total derivatives contracts transacted at Bursa Malaysia stood at 34,000 per day.

Bursa Malaysia chairman Datuk Yusli Mohamed Yusoff said the collaboration with US-based CME Group to expand trading of commodity futures, increase the volume of existing products and introduce new products, would drive the market's growth.

"We see increasing participants in the derivatives market. We expect this trend to continue as we work together with the CME Group," Yusli told a press conference at the Palm and Lauric Oil Conference and Exhibition 2011 yesterday.

Last year, CME Group - the world's largest derivatives exchange - bought a 25 per cent stake in the local derivatives market, a wholly-owned subsidiary of Bursa Malaysia Bhd. Following this, CME routed all existing and future Bursa Malaysia Derivatives products on CME's platform, CME Globex.

The fact that Malaysia's derivatives products are traded on the Globex is already a big opportunity due to the international connection it holds, Yusli said.

He added that this would allow Bursa Malaysia to further penetrate, expand its products and garner more participation with the derivatives industry, which is expected to go through a healthy stage of growth.

"There is a lot of untapped business, and with the partnership with CME, we can widen the road to the international market," Yusli explained.

Currently, a total of nine futures contracts are traded on the Malaysian derivatives market with crude palm oil futures (FCPO) and the FTSE Bursa Malaysia Kuala Lumpur composite index futures leading the active contracts.

In November 2010, the FCPO hit a record monthly volume and an all-time high of 450,000 contracts, surpassing the previous record of 440,000 contracts achieved in April 2009.

Leave a Reply