HCMC – With the Vietnam Commodity Exchange commissioned this January, the country now has three operational commodities trading floors but an expert has expressed concern about possible risk associated with those exchanges.
Commodity exchanges pose risk
By Thai Hang - The Saigon Times Daily
HCMC – With the Vietnam Commodity Exchange commissioned this January, the country now has three operational commodities trading floors but an expert has expressed concern about possible risk associated with those exchanges.
Sacom-STE, an exchange backed by Sacombank, has failed to maintain sugar transactions though it was inaugurated a few months ago.
Phan Vu Hung, head of Sacom-STE, told the Daily that in November, eight months after its opening, the exchange saw daily refined sugar trading volume total only 10 tons while the minimum amount was 500 tons.
Sacom-STE has got heavy investments, including in a US$2 million data center, a warehouse and other facilities.
“The failure has nothing to do with the exchange’s facilities but with the trading habit,” Hung said.
Coffee and rubber traders are familiar with commodity futures deals, so when the local exchanges allowed clients to engage in commodity futures transactions and options, traders have embraced this despite the lack of appropriate regulations.
Nguyen Van Nam, former head of the Trade Research Institute under the Ministry of Industry and Trade, told the Daily that offering futures contracts without an appropriate legal system, a thorough understanding and a management capability would cause risks for traders and the market as a whole.