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| Thomas McMahon and Jignesh Shah (first and second left) of the Singapore Mercantile Exchange with Ong Chong Tee of the Monetary Authority of Singapore at the SMX’s inauguration |
Singapore Mercantile Exchange, billed as the first pan-Asian multi-product commodity and currency derivatives exchange, rang its opening bell on August 31. The next question: will people use it? Chief executive Thomas McMahon describes the rationale as so obvious "it was like a light switch flicking on". Asia is the new home of world commodities demand and Singapore the natural hub to trade it: its Jurong Island is one of the world’s densest oil-refining areas, and its port one of the busiest. SMX has kicked off with four futures contracts: gold, with physical delivery to vaults near Changi airport; crude oil, in both West Texas Intermediate and euro-denominated Brent form; and a single currency pair, euro against the US dollar.
Asia is no stranger to commodities exchanges. The real action is in China, where the three domestic commodity exchanges are remarkably powerful for bourses in a country with no foreign involvement and stringent currency controls.
