17 May 2018, Singapore – Asia Pacific Exchange (APEX) announced today that it will commence trading of its first derivative contract, a USD denominated physically delivered Palm Olein Futures contract, on May 25, 2018. APEX had received its licenses from the Monetary Authority of Singapore (MAS) in February this year to operate Singapore’s third derivatives exchange and a clearing house.
Mr Eugene Zhu Yuchen, Founder and Chief Executive Officer of APEX, said, “Since obtaining the licences, APEX has intensified our preparations and has been working very closely with our market participants and partners to establish robust operations readiness and connectivity. In April, APEX held a very successful mock trading competition for our members and customers to give them an opportunity to familiarise themselves with our systems and processes. The excellent response to the competition reinforces our confidence for the successful launch of our first Palm Olein Futures contract.”
Supporting APEX as General Clearing Members are well-established names in the local futures industry including Phillip Futures, KGI Securities (Singapore), UOB Bullion and Futures, UOB Kay Hian, Straits Financial Services as well as international brokers with a new Singapore presence such as HGNH International Financial (Singapore) and DA Financial Service (S).
Palm Oil is the world’s largest vegetable oil in terms of annual production, accounting for 33% of the world’s total output. Together with soybean and rapeseed oil, Palm Oil is recognised as one of the world’s top three vegetable oils and it is widely used in food, oleo chemical and biodiesel industries. Due to its dominance in trading volume, Palm Oil’s prices influence all other oil prices in the global market. Indonesia and Malaysia surpasses all other palm oil producing countries and contributes 86% of global production and 91% of the export market.
APEX’s Palm Olein Futures contract is denominated in USD which is the mainstream currency of international trade. It complements the existing offerings of Bursa Malaysia Derivatives Exchange’s MYR denominated crude palm oil futures contract and Dalian Commodity Exchange’s RMB denominated RBD palm olein futures contract, and provides additional avenues for hedging opportunities for edible oil hedgers and traders. As a physically deliverable contract based on FOB terms, the approved delivery ports (Pasir Gudang and Port Klang in Malaysia, Belawan and Dumai in Indonesia) are located along the Straits of Malacca, which covers major producers of Palm Oil in Malaysia and Indonesia.
Mrs Lim Hwee Hua, Chairman of APEX’s Board of Directors, said that “Singapore’s well-regulated financial sector, efficient financial and technological infrastructure and deep talent pool, make the Republic an ideal location for derivatives trading. The majority of global commodity trading houses and financial institutions also have extensive operations or are headquartered here.”
Mr Zhu reiterated his vision for APEX to establish itself as an international exchange that will be the Asian centre for price benchmarks referenced by global market participants. “As global trading in commodities and financial instruments gravitates towards the region, I am optimistic that our first listed Palm Olein physically deliverable futures contract denominated in USD will meet the demands in the current market and has the potential to become the Asian pricing benchmark for palm oil.”
Subject to regulatory approvals, APEX’s future products pipeline will include a suite of commodity, agricultural and financial contracts.
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Asia Pacific Exchange Pte Ltd (APEX) is an international derivatives exchange incorporated in Singapore and regulated by the Monetary Authority of Singapore. APEX plans to list futures and options contracts covering both commodity and financial derivative products traded by global market participants. APEX’s first listed contract is a USD denominated Palm Olein Futures contract.
APEX’s clearing house, Asia Pacific Clear Pte Ltd (APEX Clear), offers innovative clearing and settlement services across asset classes for all of its exchange traded derivatives.