Vietnam Commodity Trading Joint-Stock Co. inaugurated the country’s first commodity exchange in HCMC on Tuesday, offering businesses and individuals a new channel for coffee, rubber and steel transactions.
VNX chairwoman Bach Thuy Ha (R) demonstrates online transactions of the exchange at the opening ceremony at the HCMC Opera House on Tuesday.
Nguyen Duy Phuong, chief executive officer of the Vietnam Commodity Exchange (VNX), said that transactions took place on weekdays except holidays under a continuous matching mechanism. He described the launch of the exchange as an important milestone for the country as it provided a new investment channel in Vietnam’s commodity markets.
Headquartered at 18-20 Phuoc Hung Street in District 5, the VNX has a trading floor at 52 Nguyen Cong Tru Street in District 1. Speaking at the ceremony, Phuong said Robusta coffee and rubber were the first commodities traded at the floor in the initial period before steel was added in the second quarter of this year.
These are the three commodities already approved by the Ministry of Industry and Trade for transactions at the exchange, which was previously known as the Trieu Phong Commodity Exchange when it was licensed more than three months ago.
Phuong said the ministry had approved the change to the commodity exchange, which has initial chartered capital of VND150 billion (over US$7.7 million). Phuong told the Daily after the grand opening ceremony that Trieu Phong Group was one of the founders of Vietnam Commodity Joint-Stock Co. and held an 88% stake in this company.
Operating as a joint-stock company, the VNX provides services related to commodity futures contracts and options for commodity swap as well as brokerage, goods evaluation, transactions, risk management, investment advice, derivatives and financial support.
All the commodities will undergo quality assessment before being traded through brokers on the exchange to help buyers and sellers avoid risks.
The VNX is also working with trading, brokerage and banking partners and members to handle transactions and payment. They include Bank for Investment and Development of Vietnam (BIDV), Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Maritime Bank, SME Investment Co., and Song Ngan Investment Services Co. among others.
Also on Tuesday, the global company Patsystems signed an agreement to provide technology in support of transactions and operations of the VNX. Patsystems is known worldwide as the provider of trading, exchange and risk management solutions.
Phuong said traders at the VNX were members of Vietnam’s associations of coffee, rubber and steel. However, he acknowledged that the number was still limited so the company would organize seminars and events to promote transactions via the exchange among companies as well as farmers.
Phuong said the VNX had plans to connect with the commodity exchanges in Tokyo and London in the future to have commodities at the local exchange traded with prices close to those of the world. The exchange will add commodities for trading in the future.
The VNX plans to increase its chartered capital to VND300 billion by 2012 and VND1 trillion (US$51 million) by 2015, and gets listed on the local bourse in 2014. Phuong said VND150 billion was not sufficient for future operations of the company so shares would be issued as one of the ways to raise funds.